Preamble

The House met at Half past Two o'Clock

PRAYERS

[Mr. SPEAKER in the Chair]

DEATH OF A MEMBER

Mr. Speaker: I regret to have to inform the House of the death of Sir Waldron Smithers, Member for Orpington, and I desire on behalf of the House to express our sense of the loss we have sustained and our sympathy with the relatives of the honourable Member.

Oral Answers to Questions — HOME DEPARTMENT

Cross-Channel Day Trips (Passports)

Mr. Cooper-Key: asked the Secretary of State for the Home Department whether he is aware that the proposition to maintain regular seasonal day trips to the French coast towns has the support of the local authorities of Hastings; and when he will be able to make a statement as to his conversations with other Departments concerned directed towards lifting the passport requirements.

The Secretary of State for the Home Department (Major Gwilym Lloyd-George): I have not received any communication from the Hastings Borough Council about this matter, but I do not doubt that the South Coast local authorities directly concerned support the continuance of day cruises to the Continent. The representations that have been made about the resumption of no-passport excursions to the Continent are under consideration, but I am not at present able to say when I shall be in a position to make a statement.

Mr. Awbery: Is the Minister aware that the necessity to produce day passports is killing the cross-Channel industry? Ships are built for this specific purpose, and it is stopping that industry as well. Will he see whether something

can be done to provide day passports on the ships, to be given up before people land in the evening when they return home?

Major Lloyd-George: I cannot add anything to what I have already said. This matter is under consideration. There are tremendous difficulties, particularly with regard to the matter to which the hon. Member has referred.

Mr. Cooper-Key: Will my right hon. and gallant Friend hasten a decision on this matter, in view of the seasonal planning?

Children's Comics

Mr. Dodds: asked the Secretary of State for the Home Department what progress has been made in dealing with the problem of horror publications.

Mr. Collins: asked the Secretary of State for the Home Department if he is aware that children's care (school) committees are concerned at the harm done to children by horror comics; and if he is yet in a position to announce his proposals for stopping the sale of such comics in this country.

Major Lloyd-George: While they would much prefer to see the matter dealt with by other means, the Government have come to the conclusion that they must consider the possibility of introducing legislation with a view to protecting the youth of the country. If legislation is introduced, the Government are anxious that its application should be carefully restricted to the types of pictorial publication which have, rightly, aroused so much public concern in recent weeks, and this will present considerable difficulty in drafting. A further statement will be made as soon as possible.

Mr. Dodds: I thank the Home Secretary for his reply. A vast number of people see the difficulty of legislating on this matter. May we take it from the Home Secretary that every consideration has been given to the question of a test case?

Major Lloyd-George: All these various possibilities have been looked at. I have spent a considerable time considering them. It is a matter of the greatest difficulty. The hon. Gentleman can take it that we are determined to do something about the matter.

Mr. Collins: Will the Minister, before introducing the Bill to the House, seek the advice of people who have experience on school care committees and teachers' associations, and of others in direct contact with children; and will he also say how long it will be before he hopes to introduce the Bill?

Major Lloyd-George: I do not think that I can say more than "as soon as possible." Of course, I have been in touch with a tremendous number of bodies representing various associations concerned in this matter, and everything they have said will be taken very seriously into consideration.

Borstal Girls (Psychiatric Treatment)

Miss Herbison: asked the Secretary of State for the Home Department the longest period spent by a Borstal girl in Holloway Prison for the purposes of psychiatric treatment; and what steps are taken to transfer a girl back to Borstal or elsewhere for treatment, respectively, if she appears to be making no progress.

Major Lloyd-George: Over the last three years, the longest period spent by a Borstal girl in Holloway for the purpose of psychiatric treatment was one year, but the average period is very much less. The girl is returned to her training Borstal as soon as she is considered to have received the maximum benefit from her treatment and to be fit to return. If she is not considered fit, she may be retained for further medical observation or sent to an outside hospital for further treatment.

Miss Herbison: Is the Minister aware that many people in the country feel that it is very wrong indeed that any Borstal girl should spend any time at all in Holloway Prison; and is not the disclosure that one of these girls spent a year in Holloway Prison a very shocking disclosure indeed? Will the Home Secretary do everything he possibly can to find a place which will provide this treatment outside the prison?

Major Lloyd-George: I fully sympathise with what the hon. Lady has said with regard to Holloway. There are other difficulties. The cases that go there number about six a year, and their average stay is two or three months. It would

be difficult to have a special place for such a few cases, but I am very much obliged to the hon. Lady for raising this matter.

Street Soliciting and Prostitution, London

Lieut.-Colonel Lipton: asked the Secretary of State for the Home Department what complaints he has received about soliciting in the streets of the West End of London; and what action he is taking.

Mr. Hamilton: asked the Secretary of State for the Home Department whether his attention has been drawn to the increased alarm concerning the high incidence of prostitution in London; and, in view of its possible adverse effects on the tourist industry, what additional measures he intends to take in the immediate future to deal with this social menace.

Major Lloyd-George: Not many complaints have been received in the Home Office about this problem during the last few months, but I am well aware that it causes a good deal of public concern. The number of arrests in London for street soliciting has considerably increased in recent years, and the Commissioner of Police of the Metropolis will continue to take such steps as he can, within the limits of his resources, to deal with this nuisance. Any question of amending the law must, however, await the report of the Departmental Committee on Homosexual Offences and Prostitution, which is at present taking evidence.

Lieut.-Colonel Lipton: Although about £18,000 is collected from these women in the form of 40s. fines, which they regard more or less as street-trading licences, is the Home Secretary aware that soliciting is more blatant and aggressive than it has ever been before; that this deterrent of a 40s. fine is no longer operating; and that, according to the Chairman of the British Travel Agents Association, the situation is unparalleled in the Western world?

Major Lloyd-George: I am not quite sure about the last part of the Question. It does not seem to stop travellers coming here, because the number of tourists was up last year. The figure for soliciting is


one which is creating great public concern, but I do not think we can say anything until we get the Departmental Committee's Report.

Mr. Hamilton: Can the Minister say what steps his Department has taken for the suppression of this evil, compared with the methods adopted in other countries, which seem to have been more successful than the steps taken here?

Major Lloyd-George: I cannot answer that without notice, but I can say that there has been a great deal of intensification of police patrolling in the West End, which has led to an increase in the number of prosecutions.

West Indian Immigrants

Mr. Remnant: asked the Secretary of State for the Home Department what conditions are imposed on West Indian immigrants before they are allowed entry to this country.

Major Lloyd-George: Under the existing law there is no restriction on the entry of any British subjects into this country. They are free to come here, and there is no power to make their entry subject to conditions.

Mr. Remnant: Will my right hon. and gallant Friend consider imposing the same conditions on these people as are imposed on entrants to their country?

Major Lloyd-George: This is a matter which I am sure my hon. Friend will realise is of very great difficulty and complexity. I cannot say any more at the moment than that it is being looked into.

Sir Roger Casement (Remains)

Mr. Emrys Hughes: asked the Secretary of State for the Home Department if he will now allow the remains of Sir Roger Casement to be returned to Ireland.

Major Lloyd-George: No, Sir. Successive Governments have considered this matter and have found no reason for departing from the invariable practice of refusing permission for the removal of the remains of executed prisoners. I see no reason to take any other view.

Mr. Hughes: Will not the Minister take a fresh view of this matter, and

examine it again? Is he aware that the Foreign Secretary has said, about allowing the remains of German war criminals to be returned to their families, that the policy of the Government was not to carry hatred beyond the grave? Is he aware that the Irish regard Sir Roger Casement as a distinguished patriot and a prisoner of war who was wrongfully hanged? Does he not think that it is time for this chapter to be honourably closed?

Major Lloyd-George: I think the matter had better be left. It is closed now, and I do not think that this suggestion would do anything to improve relations between Southern Ireland and this country. In fact, it might easily lead to the reverse.

Strangeways Prison

Mr. H. Lever: asked the Secretary of State for the Home Department whether he will make a statement upon the recent break-out from Her Majesty's Prison, Strangeways, Manchester; and what consideration is being given to the working conditions of the prison officers engaged at the prison.

Major Lloyd-George: On 6th November, six prisoners escaped from Manchester Prison through a skylight above the stairs leading from the shop where they had been working. Five have since been recaptured. Following an inquiry into the circumstances of the escape held by an Assistant Commissioner of Prisons, a prison officer has been dealt with on a discipline charge, and the prison Governor has been instructed as to the conditions of security under which long-sentence prisoners in a local prison are to be employed.
The possibilities of increasing the physical security of the prison in certain respects are being studied. There is no reason to suppose that this escape was connected in any way with the working conditions of the prison staff; these are constantly under review by the Prison Commissioners.

Mr. E. Johnson: asked the Secretary of State for the Home Department how many of the 25 prisoners who escaped from Strangeways Prison, Manchester, between 1945 and 18th November, 1954, and who were serving sentences of over


three years, had served more than 12 months of their sentences before they escaped.

Major Lloyd-George: Four, one of whom escaped twice.

Mr. E. Johnson: asked the Secretary of State for the Home Department how many prisoners now in Strangeways Prison, Manchester, are serving sentences of over three years; and how many of these have already served more than 12 months of their sentences.

Major Lloyd-George: The answer to the first part of the Question is 190 men and three women, and to the second part 113 men and one woman.

Mr. Johnson: Does my right hon. and gallant Friend not agree that it is very disquieting that these long-term prisoners should be kept in a local prison for more than 12 months, and is he in a position to hold out any hope that this state of affairs will be improved?

Major Lloyd-George: As it happens, this has no connection with the number of escapes, but the retention of long-term prisoners for a considerable time in local prisons is unsatisfactory, and we are trying to improve the position as soon as we can.

Mr. Awbery: Will the Minister give consideration to releasing on parole men who have served a prison sentence of 12 months, if it is their first sentence? Would not this give such men an opportunity of retrieving his position, and at the same time relieve overcrowding in our prisons. Will the right hon. and gallant Gentleman consider these two matters?

Major Lloyd-George: I will certainly consider any suggestions, but the hon. Gentleman knows there are various methods of dealing with offenders, as, for instance, the special treatment given to first offenders.

School-Crossing Patrols (Training)

Sir J. Crowder: asked the Secretary of State for the Home Department what training is given to members of school-crossing patrols in the Metropolitan Police area to ensure that they are able to carry out their duties satisfactorily.

Major Lloyd-George: Training is given to school-crossing patrols by experienced police officers in accordance with standing instructions issued by the Commissioner of Police of the Metropolis.

Sir J. Crowder: Is my right hon. and gallant Friend aware that these patrols very often do not give sufficient notice to drivers of vehicles, especially when the roads are wet, so that it is dangerous for the drivers to put on their brakes to try to stop? Secondly, who is responsible for training these patrols outside the Metropolitan area; and can my right hon. and gallant Friend say whether these patrols are empowered to stop traffic for adults who are not in charge of children?

Major Lloyd-George: In regard to the first question, the training is by experienced police officers, and includes instruction as to stopping distances, particularly on wet days. All that is laid down in the instructions. With regard to the second question about the training outside the Metropolitan area, that is a matter for the local authority, but I believe that many of them use police instructors. In reply to the third question, I have not got the Act before me, but I fancy that it is only when the crossing is used by school-children, though I am not sure about that.

Licensed Clubs (Opening and Control)

Brigadier Medlicott: asked the Secretary of State for the Home Department if he will, during the present Session of Parliament, introduce legislation to regulate the opening of licensed clubs, and for the more adequate control of such clubs.

Major Lloyd-George: I regret that I can hold out no prospect of a Government Bill on this subject this Session.

Brigadier Medlicott: Is the Minister aware that there is a serious gap in the law on this subject since the withdrawal of the appropriate Defence Regulation, and will he assure the House that the matter is actively under consideration, and that the need for legislation is at least recognised?

Major Lloyd-George: As I pointed out in my answer, there is little prospect of legislation in this present Session, and my hon. and gallant Friend will know why.

Mrs. Braddock: Is the Minister aware that there is very great need for reconsideration of this matter, and that, as the law stands, it requires the addition of only a few words to the present provision? Is he further aware that in Liverpool we are experiencing very great difficulty in dealing with premises that are unlicensed but which are selling intoxicating liquors, and that practically all the time of the police force in the central area is spent dealing with this problem? Could not the law be added to in order to give the authorities the powers that are necessary to deal with the problem?

Major Lloyd-George: I am aware of the difficulties to which the hon. Lady has referred, but the difficulty is to find Parliamentary time.

Maldon (Petty Sessional Division Title)

Mr. Driberg: asked the Secretary of State for the Home Department if he is aware that the Charter granted to the Borough of Maldon, Essex, in 1171, confirmed the borough's existing rights of infangenetheof, hamson, and blodwite, and that the exercise of criminal jurisdiction by the borough court continued without a break from before that date until the recent extinction of the quarter sessions, whereas the hundredgemot of the sparsely populated Dengie Hundred lost its criminal jurisdiction before 1327; and if these facts were among the historical considerations taken into account by the Magistrates' Courts Committee before it was decided to place the name of Dengie before that of Maldon in the title of the new petty sessional division.

Major Lloyd-George: I am informed that the Magistrates' Courts Committee was aware of the first point but that the latter was not before them, and that there is some doubt upon it. I understand that the Committee considered that the Dengie Hundred courts, which were apparently ordained by King Alfred, were the oldest local institution of which any trace has remained.

Mr. Driberg: Is it not the case that they have not had the same continuity of administration, from those early times until recently, as the Maldon court has; and, delightful as the Dengie Hundred is, is the right hon. and gallant Gentleman aware that the case of the Borough of Maldon is really very strong on historical grounds? If, as he says, there is some doubt, can he not ask the Committee to look at the matter again?

Major Lloyd-George: The doubt is whether it was there in 1327. It is altogether a complicated matter. My predecessor's decision to confirm the Committee's proposals was made, not on historical grounds, but because the Committee had carefully considered a matter that was primarily for them. There had been representations from the other side approving the change. It is a little difficult when the hon. Member refers to these charters. I have gone into this with some care. The charter, I may remind him, also refers to nam, graff, fythwythe and grethbeg. I hope that no hon. Gentleman will ask me what they mean, because I have not the faintest idea.

Mr. Woodburn: Would there be anything in the Prime Minister's memoirs that might help the hon. Gentleman?

Performing Animals (Supervision)

Mr. M. Stewart: asked the Secretary of State for the Home Department whether he will cause inquiry to be made into the methods used in the training of performing animals.

Major Lloyd-George: No, Sir. I have no reason to think that the system of supervision provided by the Performing Animals (Regulation) Act, 1925, is in need of revision.

Mr. Stewart: Has the right hon. and gallant Gentleman studied the review which I recently sent him of a recently published autobiography of a circus trainer, who stated from his experience that it was impossible to train performing animals without cruelty of a kind which contravenes the existing law?

Major Lloyd-George: I have heard that on many occasions. The Act of 1925 has very wide powers which, when proof is given, can lead to all the performances being forbidden, and indeed to the licence being taken away.

Mr. Peter Freeman: Is it not a fact that most of these animals are trained abroad in conditions which would never be tolerated in this country? Will the right hon. and gallant Gentleman receive a deputation from animal welfare societies to be given information about this subject, and give further consideration to it?

Major Lloyd-George: I do not know about a deputation, but if the hon. Member will let me have any information that he has, I shall be glad to look into it.

Greyhound Racecourse Totalisators (Betting Tax)

Wing Commander Bullus: asked the Secretary of State for the Home Department how many totalisators upon greyhound racecourses have ceased to operate since the introduction of pool betting duty in 1948; and the total revenue from the duty reported to him by local authorities in 1948 and in 1953.

Major Lloyd-George: The answer to the first part of the Question is 38, and to the second about £9,449,000 and about £6,127,000 respectively.

Brigadier Medlicott: Is the right hon. and gallant Gentleman aware that this tax is bearing very harshly upon this sport, and is producing a diminishing revenue? Could he confer with the Chancellor of the Exchequer to see whether some easement could be provided in the next Budget?

Major Lloyd-George: As my hon. Friend knows, the last part of his supplementary question is a matter for my right hon. Friend, but I am prepared to consult him on the matter.

Parking, Harley Street

Mr. E. Johnson: asked the Secretary of State for the Home Department if he is aware that motor cars are frequently parked not only on both sides of Harley Street, London, W.1, but in a double line on one side; and what action he proposes to take to stop this practice.

Major Lloyd-George: Harley Street is a one-way street and wide enough to accommodate four cars abreast; the police allow parking on both sides to meet the needs of the medical specialists. Sometimes cars wait for short periods outside those parked by the kerb, but this

does not often interfere with the flow of traffic. The police take suitable action in cases of serious obstruction.

Mr. Johnson: Is my right hon. and gallant Friend aware that this is a very frequent practice? Considerable numbers of cars are parked in the middle of the street, and that reduces traffic in Harley Street to a single lane.

Major Lloyd-George: My hon. Friend will appreciate that there are special circumstances here, because doctors are very often required for emergency calls both to hospitals and patients. [An HON. MEMBER: "Not in Harley Street."] Oh, yes. There is no adequate parking accommodation anywhere near. A few complaints have been received, and, where obstruction has been caused, action has been taken, and 13 summonses have been issued this year.

Colonel Gomme-Duncan: Is my right hon. and gallant Friend aware that it is alleged, with considerable weight, that the vast majority of the cars parked in Harley Street do not belong to the doctors.

Local Elections (Voting Returns)

Mr. MacColl: asked the Secretary of State for the Home Department whether he is aware of the blemishes in Table V in the Registrar General's Statistical Review, Part II, Civil, 1952, caused by the failure of local authorities to make returns of the number of votes cast in local elections; and what steps he is taking to secure a greater amount of cooperation from these authorities during the next local elections.

Major Lloyd-George: These returns are made at my request, but I have no power to require local authorities to make them, and I am glad to take this opportunity to express my thanks for the ready co-operation of most local authorities in making them voluntarily. Thirty-two local authorities did not make returns in 1952, but I am happy to say that the tables for 1953 and 1954 will show a substantial improvement in this respect, and I have every hope that this improvement will be maintained in 1955.

Mr. MacColl: Is the right hon. and gallant Gentleman aware that the later ones did not include county council returns because there has not been a county


council election since 1952; and that 10 of the failures have been, not by small authorities, but by county councils? Does he not think that this indicates a remoteness and lack of co-operation on the part of the county councils, and that people will bear that in mind when they come to consider the reform of local government?

Major Lloyd-George: indicated assent.

Police Widows (Pension Scales)

Mr. Remnant: asked the Secretary of State for the Home Department whether he will now consider bringing the pre-Oaksey police widows up to the new scales proposed for National Insurance pensioners.

Major Lloyd-George: I am considering what amendments to the Police Pensions Regulations will be necessary in the light of the increased rates of benefits proposed in the National Insurance Bill. As on previous occasions, police widows whose husbands died before 5th July, 1948, will benefit by any increases in police widows' pensions based on the new rates, but I cannot hold out any prospect that it will be possible to treat them more favourably than other widows whose husbands died before the introduction of the National Insurance Scheme.

Mr. Remnant: In thanking my right hon. and gallant Friend for his reply, may I ask him whether he is aware that that answer will give at least some hope to these widows?

Dr. King: Is the Home Secretary aware that the only difference between these widows and other police widows is the date on which their husbands died, and that the police themselves, out of loyalty to their dead colleagues, have always supported the claim of these widows for justice?

Major Lloyd-George: I think that the hon. Member would agree that this matter has been considered by many of my predecessors, and that it is a very difficult question. While every one of my predecessors and I have the greatest sympathy with these cases, they are very difficult and not easily dealt with by Question and answer.

Miss Ward: Will the Minister bear in mind that this is one of the small-income groups in respect of which we are hoping that some action will be taken by the Government?

Prison Officers (Accommodation)

Mr. Erroll: asked the Secretary of State for the Home Department what steps he is taking to ensure that adequate provision for the housing of prison warders and their families is being secured at the present time.

Major Lloyd-George: The number of men prison officers (all grades) is at present 4,197; the number of married quarters is 3,080. A further 323 quarters are under construction or about to start. Another 233 quarters are planned to start in 1955–56.

Mr. Erroll: While this rate of progress is satisfactory, is the Home Secretary satisfied that the shortage of adequate housing is not proving a deterrent to the recruitment of prison warders?

Major Lloyd-George: It is very difficult to answer that question. The general aim is to get married quarters for about 75 per cent. of the staff, and I think that the progress made will achieve that aim very soon.

New Prisons (Building Programme)

Mr. Erroll: asked the Secretary of State for the Home Department to make a statement on his plan for the construction of new prisons.

Major Lloyd-George: The Prison Commissioners' authorised programme of new building comprises, in addition to two Borstals for boys and two for girls, two secure training prisons, each for about 300 men, and a special psychiatric prison commonly known as the East-Hubert Institution. The first new security prison, at Everthorpe, near Hull, is in course of construction. Progress with the second has been held up by difficulties in obtaining planning clearance for the proposed site, but it is expected that these will shortly be resolved. Planning clearance for the site of the East-Hubert Institution, at Grendon Underwood, Buckinghamshire, has been obtained, and designs for the building are being worked out.

Mr. Erroll: Are these plans adequate to deal with the serious problem of prison congestion today?

Major Lloyd-George: The programme is certainly a very notable contribution and, as my hon. Friend is aware, the prison population has fallen substantially below the peak, and the trend, I am glad to say, is still a downward one.

Mr. P. Morris: Has the Home Secretary abandoned the policy of modernising old prisons, and is he now concentrating on building modern, satisfactory buildings?

Major Lloyd-George: That is not altogether so. Apart from new prisons, we have, for temporary purposes, taken back into use one, if not two, to relieve congestion. Other buildings have been taken over for temporary use as prisons.

Mr. Benson: I notice that the list of proposed new prisons and Borstals given by the Home Secretary did not include one institution which was foreshadowed in the last Report of the Prison Commissioners—a prison for aged and decrepit prisoners, now kept in maximum security cells. Has that been abandoned?

Major Lloyd-George: If the hon. Gentleman will allow me to do so, I should like to look into that question.

Approved School Accommodation

Miss Ward: asked the Secretary of State for the Home Department whether, in view of the declining number of girls and boys being sent to approved schools and the increased cost often due to the maintenance of those schools on full running efficiency, he will, in the interest of economy, close the appropriate number of schools and concentrate the effort on fewer schools.

Major Lloyd-George: The amount of approved school accommodation available is kept under constant review in relation to the demand. During the last five years, 18 schools which had become surplus to requirements have been closed, and two reduced in size. Two more schools are to close at the end of this month.

Miss Ward: Will the Minister bear in mind that there are many voluntary

managers of these schools who think that his policy might be implemented a little more quickly? Should I be in order in suggesting that if he could save a little more money he could apply it to dealing with the pre-Oaksey widows?

Major Lloyd-George: I see very little connection between the two matters. The fact is that in approved schools a margin has always to be kept for contingencies—about 10 per cent. for boys and 15 per cent. for girls—and the figure for new accommodation available fits in with that requirement.

Miss Herbison: Will the Minister remember that in this matter he is dealing, not with a number of inanimate objects, but with young people who have already found it difficult to fit themselves into society? If he is going to make any further disclosures about future reorganisation, will he always keep before him the need for keeping these young people in their own age-groups, and in the categories in which they are at present?

Major Lloyd-George: I am giving the matter constant attention, and I shall certainly bear that requirement in mind.

Oral Answers to Questions — EDUCATION

Teachers, Birmingham

Mr. Wyatt: asked the Minister of Education whether he will arrange for a local cost-of-living allowance to be paid to teachers in Birmingham in order to induce teachers to take up posts in that city.

The Minister of Education (Sir David Eccles): I am much concerned about Birmingham's difficulties, and expect shortly to discuss them with the authority. But I could only do as the hon. Member suggests on the recommendations of the Burnham Committee. In 1953, this Committee decided, after consideration of the conditions in Birmingham, that special provincial allowances should not be paid to teachers simply because they worked in difficult areas.

Mr. Wyatt: Will the Minister bear in mind that at present more teachers are leaving than are being engaged? Resignations exceed new engagements, and


something very urgent and drastic needs to be done if the position is even to be held.

Sir D. Eccles: I fully realise the position. That is why I am going to have a talk with the authority.

Mr. Shurmer: Is the Minister aware that Birmingham, now being short of teachers, draws many of its young men and women from outside the city, and that as a result of the shortage of housing accommodation they have to spend a large part of their salaries in paying for rooms and lodgings? That is the great difficulty in Birmingham today, and the right hon. Gentleman ought to do something to help us to get teachers for our overcrowded schools, and to give them a chance to live in Birmingham—not exist.

Sir D. Eccles: I intend to discuss the housing position with the authority.

All-age Schools (Reorganisation)

Mr. Morley: asked the Minister of Education what plans he has for the reorganisation of all-age schools into primary and secondary schools in the near future.

Sir D. Eccles: My plans are set out in paragraph 5 of Circular 283, of which I am sending the hon. Member a copy.

Mr. Morley: Is the Minister aware that my Question was tabled before this Circular was issued? Is he further aware that educationists are very glad that, owing to constant pressure from hon. Members on this side of the House for the last three years, the hated Circular 245 has now been dropped? May I further ask him what action he proposes to take against reactionary county councils who do not take full advantage of the freedom which he has now offered them?

Sir D. Eccles: I shall wait to see how they react before I call them reactionary.

Dr. King: asked the Minister of Education to what extent local educational authorities will be permitted to include in the current year's building programme additional new schools whose main purpose is to make reorganisation of all-age schools possible.

Sir D. Eccles: I am sending the hon. Member a copy of my recent Circular to

local education authorities. I am prepared at once to add to the 1954–55 programme any projects which fall within the terms of paragraph 5 of that Circular, and which authorities can start before the end of March, 1955.

Dr. King: Is the Minister aware that those of us who are delighted at the change of policy on the part of the Government, so far as the reorganisation scheme is concerned, are equally delighted at the fact that he will allow those authorities which have plans for schools waiting for permits to include those plans in this year's programme?

Village Halls (Grants)

Mr. Crouch: asked the Minister of Education if he is now able to make a statement with regard to grants for village halls.

Sir D. Eccles: As I told the House last week, I will now consider applications from voluntary bodies for grants towards the cost of providing a hall or community centre.

Mr. Crouch: Is the Chancellor putting any restriction upon the amount of money he can spend in connection with these grants? Further, will he expedite the granting of permission as much as possible—because difficulties have arisen in obtaining planning permission as well as permission from him for the grant of the money—so that we can get some halls built before next winter?

Sir D. Eccles: The general rate of grant will be 33⅓ per cent., and as soon as the applications come forward I shall deal with them.

Mr. Collins: Can the Minister say whether grants will apply only to village halls to be built, or can anything be done if applications are received from villages in respect of halls which have already been built, but in respect of which a heavy mortgage is still outstanding?

Sir D. Eccles: I think not. I think they apply only to new buildings.

Private Schools (Staff Lists)

Mr. Dodds: asked the Minister of Education how many proprietors of private schools have not yet responded to the request made by his Department to supply lists of their staffs; if he will


give an estimate of the number of pupils who are connected with the schools; and what action he is taking to ensure that the young people concerned are given reasonable protection against undesirable teachers.

The Parliamentary Secretary to the Ministry of Education (Mr. Dennis Vosper): Two hundred and thirty-four schools have not yet responded, of which 75 have probably closed. My right hon. Friend does not know the exact number of pupils involved, but all the schools concerned are small. He is taking action to hasten outstanding replies.

Mr. Dodds: Will the hon. Gentleman say what action he is taking, because there must be several thousand children in these schools which have still not answered the request made to them months ago? What is the use of taking legislative action to deal with horror comics in order to protect children if some of these horror schools are not dealt with very quickly and ruthlessly?

Mr. Vosper: It is a fact that 3,283 schools have replied. That compares with only 234 which have not, and that number is itself 46 better than the figure I gave when I previously replied to a Question by the hon. Member on 24th November. I should have thought that he would have shared my view that the progress made is encouraging.

Service Men's Children

Mr. Dodds: asked the Minister of Education if he will make a statement showing what progress has been made resulting from his discussions with the three branches of the Armed Services on the general question of the education of Service men's children.

Sir D. Eccles: I cannot yet add anything to the reply which I gave to the hon. Member on 21st October last.

Mr. Dodds: Does not the right hon. Gentleman appreciate that it is a matter of the greatest concern to serving officers that their children are being heavily penalised in this very important matter of education?

Sir D. Eccles: I agree that this is an urgent matter, but it has turned out to be a very difficult one for which to institute a fair scheme.

Mr. Wigg: Has the right hon. Gentleman's attention been drawn to the recommendation of the Select Committee which dealt with the Army Act and the Air Force Act that close attention should be given to the question of the education of Service men's children?

Sir D. Eccles: Yes, Sir.

Schoolchildren (Public Transport)

Mr. Remnant: asked the Minister of Education whether he will invite local education authorities to consult rural omnibus operators in order to minimise the congestion caused by the requirements of carrying schoolchildren and workpeople traffic at the same peak time.

Sir D. Eccles: I am sure local education authorities will do this on their own initiative.

School Sanitary Arrangements, Flixton

Mr. Edward Evans: asked the Minister of Education what representations he has had made to him regarding the sanitary arrangements at Flixton School, Suffolk; whether he is aware that parents and the managers are dissatisfied with the present arrangements; and, in view of possible increase in numbers of pupils, if he will press the local authority to install flush lavatories as soon as possible, as is done in many other rural schools supplied with piped water.

Sir D. Eccles: Since the hon. Member raised this case with my predecessor no representations have been received. I understand that the local education authority is considering the difficult question of providing flush lavatories in schools which are not yet connected to a main sewer.

Mr. Evans: Is the right hon. Gentleman aware that this school has lately had to be disinfected owing to very serious infection there? Is he further aware that the whole cost involved would not exceed £200? Without making any invidious comparisons, would it not be equitable if the large sums which are spent upon some schools in providing all the frills of education were utilised in bringing these country schools up to a proper standard of sanitation?

Sir D. Eccles: I have great hopes that the removal of the ceiling on minor works will enable local education authorities to do many of these jobs, but if a sewerage scheme is coming it is surely a matter for argument whether it is worth spending money in the interval upon a septic tank.

New Schools (Cost Limits)

Dr. King: asked the Minister of Education if he will raise at once the permitted cost per place of new school buildings.

Sir D. Eccles: I have nothing to add to the answer which I gave the hon. Member on 25th November.

Dr. King: Is the Minister aware that Ministerial adjustments to the permitted costs lag behind the constant rise in the cost of labour and materials for building, and that many areas, especially those adopting the type of construction which his own Ministry has recommended, find it difficult to get their costs inside the permitted figures?

Sir D. Eccles: My impression is rather different. I think that improvements in building, which have been admirable, have in many cases allowed the increase in normal building costs to be absorbed, and that the present limits are all right.

Dr. King: May I assure the Minister, from my own experience on a local education authority, that that is not so?

School-building Programme

Mr. Swingler: asked the Minister of Education to make a statement on the school-building programme for 1955–56; and how it will compare with the 1954–55 programme.

Sir D. Eccles: The total value of major projects in the 1954–55 school-building programme is about £48 million, and of minor projects about £6½ million. I cannot give corresponding figures for next year as I do not know how much additional work authorities will be ready to undertake for rural reorganisation, or to what extent they will use their freedom to spend what they like on minor projects.

Mr. Swingler: Has the Minister had time to study the decline in the number of schools under construction during the

past three years? In view of the apparent new look at the Ministry of Education, can we take it that the building programme for next year will be an improved programme, and that he will now reverse the trend, so that there will be an increase in the number of schools under construction?

Sir D. Eccles: The hon. Gentleman is always interested in schools under construction, but we are interested in performance rather than plans. The number of schools completed has steadily increased, and will continue to increase.

Mr. Swingler: How will the Minister get performance unless he builds the schools?

Sir D. Eccles: It is the speed with which they are constructed which is important. The hon. Gentleman reminds me of someone who measures the strength of a political party by the number of candidates put up for election, and not by the number of seats won.

Mr. Swingler: asked the Minister of Education if he will now include the proposed school for handicaped children in the 1955–56 school-building programme for the excepted district of Newcastle-under-Lyme.

Mr. Vosper: My right hon. Friend is still awaiting a reply from the Staffordshire authority, who were asked to reconsider this proposal some time ago.

Mr. Swingler: Is it not a fact that the Staffordshire authority put forward this project in the last proposed building programme, and that the predecessor of the right hon. Gentleman cut it out? Would he not tell the Staffordshire authority to include this project, responsibility for which his Ministry will accept?

Mr. Vosper: The Staffordshire authority has one special school in the current year's programme, and a special school is also authorised for next year's programme. This particular project is one which the authority agreed to reconsider in September this year.

Teachers (Recruitment)

Mr. M. Stewart: asked the Minister of Education what steps he proposes to take to increase the supply of teachers.

Sir D. Eccles: The net increase in the number of teachers was 5,600 in 1952 and 6,100 in 1953. The increase this year is expected to be as large as last year's. As I said in my answers to the hon. Member for Southampton, Itchen (Mr. Morley) on 18th November, the training colleges were substantially filled this autumn.

Mr. Stewart: Does the right hon. Gentleman remember that figures given by his predecessor show that it will be necessary to double the intake of the teaching profession during the next few years if we are to make any substantial reduction in the size of classes?

Sir D. Eccles: I think that if we continue to have net increases of 6,000, or rather more, we shall be doing pretty well.

Oral Answers to Questions — FIELD MARSHAL MONTGOMERY (MILITARY DOCUMENTS)

Mr. Wigg: asked the Prime Minister whether he will institute proceedings under the Official Secrets Acts in view of the fact that Field Marshal Lord Montgomery, on leaving the Army, signed declaration C of Appendix XXX to Queen's Regulations in which he declared that he had not then in his possession or control any sketch, plan, article, note or document, made or acquired by him in the course of his military duties save such as he had been authorised to retain by his superior officer, and yet had retained unsorted and uncatalogued documents of this class.

The Prime Minister (Sir Winston Churchill): No, Sir. Field Marshal Lord Montgomery has not left the Army, so the Question is ill-informed as well as ill-natured.

Mr. Wigg: Before I ask my supplementary question, may I raise a point of order, of which I gave you prior notice, Mr. Speaker? When I framed my Question and submitted it to the Table, I was informed that it could not be based upon the assumption that Field Marshal Lord Montgomery was still serving. I understand that many hon. Gentlemen on both sides of the House have attempted to get Questions placed on the Order Paper regarding either the sayings

or the goings-on of Field Marshal Lord Montgomery, but that invariably these Questions have been refused on the ground that Field Marshal Lord Montgomery has, in fact, left the Army. Would you, therefore, Sir, on that point make it clear that the form which my Question takes was based, not upon my absence of knowledge, but upon the rules of order of this House?

Mr. Speaker: The hon. Member raises a question which is hardly one for me, except in so far as the admissibility of the Question on What is said by the noble Lord is concerned. It seems that, as a Field Marshal, he is still in the Service, but Ministers have already disclaimed responsibility for what he says as a servant of N.A.T.O. I must take it from Ministers. It is not a matter for me, but one of general law and military discipline.

Mr. Wigg: Further to that point of order. Before asking my supplementary question, may I take it that Field Marshal Lord Montgomery is either in the Army or out of the Army according to the convenience of the Prime Minister?

The Prime Minister: Field marshals are always in the Army, and I am surprised that an Army schoolmaster did not know that.

Mr. Wigg: Further to that point of order. When I submitted my Question to the Table, I was specifically informed that the fact that Field Marshal Lord Montgomery held the rank of field marshal had nothing whatever to do with it. My Question had to be altered in order to be based on the view of the Table that Field Marshal Lord Montgomery had left the Army. Can we have your Ruling on that point, Mr. Speaker?

Mr. Speaker: I think there is a little confusion here. The Clerks at the Table and I have to go on what Ministers say as to their responsibility. It is not a matter which I or the Table can judge. Ministers have said that anything that Field Marshal Lord Montgomery has said as a servant of N.A.T.O. is not a matter for which Ministers are responsible. The Clerks at the Table are entitled—indeed it is their duty—to assume that the fact is so. Beyond that, I am afraid I cannot assist the hon. Gentleman.

Sir T. Moore: Further to that point of order. Is it not the fact that Field Marshal Lord Montgomery is a serving soldier who has been seconded to N.A.T.O for a certain period?

Mr. Wigg: May I now put my supplementary question? Is the Prime Minister aware that, as he is a soldier of such long service, it does not matter very much whether Field Marshal Lord Montgomery has left the Army or not? If the Field Marshal has left the Army, is he not liable to proceedings under the Official Secrets Act, and, if he is still in the Army, should he not be proceeded against by court-martial under Sections 40 and 41 of the Army Act?

The Prime Minister: I was answering the Question on the Order Paper.

Mr. H. Morrison: May I ask the Prime Minister why, when an hon. Member puts down on the Order Paper a legitimate Question not couched in abusive terms, the Prime Minister in his original answer—before he has been knocked about by supplementary questions, if he was going to be knocked about by supplementary questions—gives such a discourteous answer? Has he got into such a state of sensitiveness about Field Marshal Lord Montgomery that he can never keep his head about this matter?

The Prime Minister: I am bound to say that I thought it was rather unworthy—[HON. MEMBERS: "Why?"] I am going to say why when I have an opportunity—to put on the Order Paper of the House of Commons a suggestion that an officer of this distinction should be considered for prosecution, and to spread that all about the world where his name is known, and when he has a large and important international duty to discharge. Therefore, I thought it perfectly right to make a retort which, I am glad to see, has struck home.

Mr. Shinwell: Leaving aside for the moment any question of disrespect to Field Marshal Montgomery, because I am quite sure none is intended—certainly so far as many of us are concerned, we have the highest regard for the Field Marshal, more particularly when he is making desperate efforts to support the Prime Minister—may I ask the right hon. Gentleman whether it is customary,

apart from the Official Secrets Act, which I do not invoke at the present moment, for officers in the Army, of whatever rank, to retain secret documents without the permission of the Prime Minister, and whether the Prime Minister has not a record of those secret documents?

The Prime Minister: All extremely secret messages, of which there were a great number, which were sent to commanders at the front, were, by order, destroyed immediately they had been orally imparted.

Mr. Ross: That explains the telegram.

The Prime Minister: At the same time, I thought it right to pursue every channel which might yield information on a point about which I have been anxious, and, consequently, I asked whether, among private papers or diaries, there was any record. I was not aware when I began my inquiries that this strict order for destroying all documents at the moment in the headquarters at the front had prevailed, but it seems to me that it is very obvious why orders of that kind had to be destroyed.

Mr. Shinwell: May I ask the right hon. Gentleman whether this matter has not gone a little further than the question whether there is a telegram in the possession either of the Prime Minister or of the Field Marshal? Does not the question now emerge whether it is desirable that Army officers, or officers of any of the Services, of whatever rank, and whether on the active list or not, should retain documents of a secret character? Can we be assured that the Prime Minister will take immediate steps to see that such documents, if retained by Service officers, should immediately be sent back in order to be placed in the Cabinet file?

The Prime Minister: Now that we are nine years from the war, I see no need to alter the procedure which has hitherto obtained.

Mr. M. Lindsay: Is my right hon. Friend aware that the whole nation will agree with him that this Question on the Order Paper is beneath contempt?

Hon. Members: Withdraw.

Mr. Speaker: Order.

Mr. Wigg: On a point of order. In view of the very unsatisfactory nature of the reply—

Mr. Shinwell: Further to that point of order. In the interest of hon. Members in all quarters of the House, without exception, may I ask you, Mr. Speaker, whether it is proper, in accordance with Parliamentary tradition, for any hon. Member to describe a Question placed on the Order Paper with the consent of the Table as being "beneath contempt"?

Mr. Speaker: It is strong language. I cannot say that it is un-Parliamentary because I do not think that there is any allegation against the hon. Member for Dudley (Mr. Wigg) that he behaved in an improper way.

Mr. Shinwell: Surely, with very great respect, Sir, is it not an imputation against the hon. Member concerned to describe a Question on the Order Paper as being beneath contempt, and is it in accordance with Parliamentary tradition?

Mr. Speaker: I do not think that I understood the right hon. Gentleman. Was he referring to the supplementary question asked by the hon. Member for Solihull (Mr. M. Lindsay)? [HON. MEMBERS: "Yes."] I would say at once that it is out of order, in supplementary questions, to make allegations against other hon. Members, but this matter has engendered so much cross-fire on both sides that I do not think the House should trouble with it more. In the meantime, notice has been given that the matter is to be raised on the Adjournment.

Mr. Wigg: Further to my right hon. Friend's point of order. As far as I am concerned, Mr. Speaker, I have not the least objection to any names that I may be called by hon. Members opposite. The point at issue here is of fundamental importance. It concerns whether this country is getting value for the money spent on defence. That is what we are after, and we shall continually seek to establish that fact, despite the fact that the Prime Minister has used a non-existent telegram in order to draw a red herring across the trail.

Mr. Speaker: I do not think that there is anything in that point of order for me.

Mr. Driberg: I wonder if you would be good enough, Mr. Speaker, for the guidance of the House, to clarify a little

further the statement you made in reply to the original submission by my hon. Friend, of which he said that he had given you previous notice? I gather from you, Sir, that by implication you have confirmed that my hon. Friend had been given information by the Table which has today turned out to be inaccurate, and that you then added that that information was conveyed to you or your office, or the Table Office, by the Minister concerned. You said that the Chair had to take information from Ministers about their responsibility. If I may say so with great respect, Mr. Speaker, is not the House in a very extraordinary position if that arises, and if then the Minister concerned—in this case the Prime Minister—can avoid answering the Question on the Paper by saying that it is based on an inaccuracy, that inaccuracy having emanated in the first instance from his own office?

Mr. Speaker: I must answer this point at once because there is a misapprehension. When I spoke of the Clerks of the Table being informed by Ministers, I did not refer to any specific question by the Table to the Minister, because there was no such communication between the Table and any Minister in this case. What the Clerks at the Table and I had in mind was an answer given on 8th December by the Foreign Secretary, Sir Anthony Eden, which hon. Members will find, in c. 943 of HANSARD of that day. Questions were addressed to the Foreign Secretary by the hon. Member for South Ayrshire (Mr. Emrys Hughes) about something that the Field Marshal had said. The Foreign Secretary stated:
Field Marshal Montgomery is, of course, not a servant of Her Majesty's Government. He is a servant of N.A.T.O. He is perfectly entitled to express his opinions, as are other people in a world which is still free, …"—[OFFICIAL REPORT, 8th December, 1954; Vol. 535, c. 943.]
It is what Ministers say openly in this House and not privately that guides me and the Clerks at the Table. It is on that point that the Clerks at the Table have sometimes refused Questions, because they were directed to the Field Marshal's responsibility to N.A.T.O. and not to the Minister. That is all.

Mr. Driberg: Would it not seem to you also, Sir, that there is some conflict between what the Prime Minister said, what


my hon. Friend was informed, and what the Foreign Secretary said on that occasion?

Mr. Speaker: I think not.

Mr. Woodburn: Further to that point of order. There are some other important Questions addressed to the Prime Minister. A lot of time has already been taken up with points of order which have nothing to do with the Question.

Mr. Speaker: I do sympathise with the right hon. Gentleman. I quite agree. It is very unfortunate—

Several Hon. Members: rose—

Mr. Speaker: Order. We cannot really spend more time on this matter.

Mr. Wigg: As the Prime Minister has not replied to my supplementary question, I take it that, if I wish, I shall be in order in placing another Question on the Order Paper, based upon the Prime Minister's reply today, that the Field Marshal is liable to the Army Act?

Mr. Speaker: The hon. Member had better frame his Question, and I shall certainly look at it.

Mr. S. Silverman: rose—

Mr. Speaker: Is the hon. Member rising to a point of order?

Mr. Silverman: Yes, Sir. In view of the contradictory answers given on this point at different times by the responsible Minister, I should like it to be made quite clear, if possible, that Field Marshal Montgomery is, in fact, in the service of Her Majesty and that, therefore, however distinguished he may be, Questions about him are properly asked, and will no longer be refused at the Table.

Mr. Speaker: It is not for me to pronounce generally on the status of the noble Lord, the Field Marshal. I must be guided on the subject of Ministerial responsibility by what is said in this House by Ministers. That is all I can say.

Mr. Rees-Davies: Is it not high time that this House buried this latest piece of wiggery, jiggery, and pokery?

Mr. Emrys Hughes: On a point of order. As Question No. 46 is the next to be answered, and as the Prime Minister

is here and there are other telegrams in which we are interested, could the right hon. Gentleman, with the permission of the House, answer No. 46?

Mr. Speaker: I could not, under the Standing Order, permit such a course. I have not previously been asked for leave to be given to answer it.

BUSINESS OF THE HOUSE

Mr. H. Morrison: May I ask the Lord Privy Seal to state the business for next week?

The Lord Privy Seal (Mr. Harry Crookshank): Yes, Sir. The business for next week will be as follows:
MONDAY, 13TH DECEMBER AND TUESDAY, 14TH DECEMBER—Committee and remaining stages: National Insurance Bill.
In view of the urgent need to pass this Bill into law before the Christmas Recess, we shall ask the House to assist us in completing the remaining stages of this Bill by Tuesday, 14th December.
WEDNESDAY, 15TH DECEMBER—Debate on a Government Motion to take note of the four Reports from the Boundary Commissions.
Motions to approve: Draft Parliamentary Constituencies Orders.
THURSDAY, 16TH DECEMBER—It is hoped to complete consideration of the Motions to approve the Draft Parliamentary Constituencies Orders.
FRIDAY, 17TH DECEMBER—Committee and remaining stages: Wireless Telegraphy (Validation of Charges) Bill.
Second Reading: National Service Bill.
Committee stage: Money Resolution.
It will, no doubt, be convenient for me to inform the House of the likely dates of the Christmas Recess. I have already referred to the urgent need to pass the National Insurance Bill through both Houses before Christmas. We have also to pass the National Assistance Regulations. The dates we have in mind are as follows: to adjourn for Christmas on Wednesday, 22nd December, and to meet again on Tuesday, 25th January, but we shall only be able to adhere to


these dates if the business that I have announced, and other necessary business, is completed.

Mr. Morrison: The right hon. Gentleman will appreciate that, at this stage, it is not possible to be certain that consideration of the Boundary Commission's recommendations will necessarily be completed on Thursday. I am not saying that they will not be completed, but neither I nor the right hon. Gentleman, at this stage, know how far the recommendations may prove controversial. Hon. Members concerned may wish to debate and divide on a certain number; we do not know whether that number will be great or small. Therefore, the position must be rather open.
My other point relates to the Financial Resolution to the National Insurance Bill. It is, of course, for the Chair to rule, and the Chair has all the final authority, but may I ask the right hon. Gentleman or the Minister of National Insurance, whoever is the appropriate Minister, whether the Government, in contriving the Financial Resolution, did not intend to exclude the possibility of Amendments being moved either to vary the contributions or the benefits, downward in one instance, and possibly upward in the other? May we take it that the Government, in drafting the Financial Resolution, did not intend 'to exclude such Amendments from consideration in Committee or on Report?

Mr. Crookshank: The right hon. Gentleman is right; it is not for me, ultimately, to pronounce on the matter. I can only say what was the Government's intention in drafting the Resolution. We had it in mind to make the Resolution as wide as possible so as to enable Amendments to be proposed relating to the rates of benefit and to the rates of contributions, including the Exchequer supplement. I can only hope that the drafting has followed the intention.

Mr. S. Silverman: Can I draw the right hon. Gentleman's attention to the fact that certain Motions for the appointment of Select Committees and one Joint Committee have not yet been passed because some of my hon. Friends and I have objected to them, in circumstances which, I think, he fully understands. Can

he say when the Government will give time to discuss these Motions? Obviously, sooner or later, the House will desire to set up these Committees.

Mr. Crookshank: I cannot say when they will be taken. We would hope to get the Motions this week but, if not, then next week, I hope—but I cannot state a date. But what I will say to the hon. Gentleman—as he is probably the hon. Member most interested in the matter—is that I will try to give him advance notice of when I think we can find the time.

Mr. Bevan: In answer to the earlier question put by my right hon. Friend, the Leader of the House said that the Government had in mind that the Money Resolution in connection with the National Insurance Bill should be drawn so widely as to enable Amendments to be moved on benefits, contributions and the Government supplement—including, he said, the Government supplement. From that observation, do I understand that there will be an opportunity to move an Amendment to increase the supplement?

Mr. Crookshank: That was the general intention, but, as the right hon. Gentleman pointed out, I cannot lay down any ruling as to what is finally in order.

Mr. Bevan: The right hon. Gentleman did say "including the Exchequer supplement." Whatever may be the ruling of the Chair, I am asking what is the mind of the Government? Did they intend that the Financial Resolution should be so wide as to enable an Amendment to be moved to increase the Exchequer supplement to the National Insurance Fund?

Mr. Crookshank: I did not say anything about increasing. What I said was "to enable Amendments to be proposed relating to the rates of benefit and to the rates of contributions, including the Exchequer supplement."

Mr. Nabarro: Has my right hon. Friend's attention been drawn to the report of an important committee, presided over by Sir Hugh Beaver, on the subject of atmospheric pollution, or smog? Can he provide early facilities for a debate on this subject?

Mr. Crookshank: I am afraid not. The situation at present is as stated by my


right hon. Friend the Minister of Housing and Local Government, on 7th December. The committee's recommendations are being considered, and he will make a statement in due course.

Mr. Bevan: I am anxious to be quite clear about the Financial Resolution to the National Insurance Bill, because there have been so many discussions before about the width of such Resolutions. All we need to know is what the right hon. Gentleman has in mind. He has made a reference to the Government's contribution to the Fund. If he does not mean that it is the Government's desire to make the Financial Resolution wide enough to allow an Amendment to be made to increase, obviously he has made no concession at all, because we can always move to decrease. What I want to know is whether he had in mind the fact that we would be allowed to move an increase in the Government contribution.

Mr. Crookshank: The phrase which I used—and I think it is the technical one understood by those concerned in this matter — was "the Exchequer supplement."

Dr. King: Since we are discussing next week one of the most fundamental parts of the democratic structure of this country, and since reasoned objections have been made by hundreds of groups of people to the proposals of the Boundary Commissions, will the Minister lay before the House the detailed reasons why the Boundary Commissions have proposed their various changes?

Mr. Crookshank: That is a question for my right hon. Friend the Minister of Housing and Local Government, and not for me.
Proceedings of the Committee on National Insurance [Money] exempted, at this day's Sitting, from the provisions of Standing Order No. 1 (Sittings of the House).—[The Prime Minister.]

Orders of the Day — NATIONAL INSURANCE BILL

Order read for resuming adjourned debate on Question [8th December], That the Bill be now read a Second time.

Question again proposed.

3.42 p.m.

Mr. Douglas Jay: After two rather extraordinary speeches from the Treasury Bench yesterday, there is one question to which the old-age pensioners would dearly like a reply, and which remains entirely unanswered: why did the Minister wait to introduce these proposals until December, and so make it impossible to give any help to the pensioners before the winter? Why did he not, as we did in 1951, introduce the Bill in April and so bring the increases into effect well before the winter began?
Two different explanations of this delay have been given by the Minister. First, in answer to a question of mine in the previous debate on 16th November, he said that he did not act last summer because he was afraid of being accused of electioneering. Does he really want us to tell the old-age pensioners that that is his reason for keeping them waiting for these last nine months?
Secondly, and more frequently, we have been told that the Government were waiting for the Phillips Committee's and the Actuary's Reports. According to my information, the Phillips Committee Report reached the Minister during the weekend of 27th November. But let us note this: the Report by the Government Actuary on the financial provisions of the Bill is dated Wednesday, 1st December. Even if we accept the definition of an actuary by the Minister of Defence, as "a man who is dead on time," I really do not believe that the Government Actuary could have produced this detailed Report in fewer than 48 hours.
In that case, the Bill must have been ready on Monday, 29th November. The Minister is, therefore, asking us to believe that the whole of this vastly complicated scheme was worked out, and the Bill prepared, and approved by the Government, between Saturday and Monday. Nobody really believes that. And if it is not true the main reason


given for keeping the old people waiting all these months is exposed as just a cynical pretence.
I should like to ask the Minister now: was this Bill already in print on Monday, 29th November? If he would like to answer that question, I will give way. [HON. MEMBERS: "Answer."] You see, Mr. Speaker, the Minister is not willing to answer that question. For that reason, I think he would have been much wiser not to have indulged in all these conjuring tricks at the expense of the old people.
The Minister could reasonably, in my view, have done one of two things. He could either have introduced an interim Bill last spring, and left the final review until these Reports had been received. Or he could have waited for the full review and then acted in the light of its conclusions. We would have done the former. But he has done neither. He has kept the pensioners waiting all these months, and what he has now produced is only, on his own showing, a provisional scheme. For it ignores entirely the main proposals of the Phillips Committee, and he now admits that there has got to be further and fuller consideration of the Phillips Report. What we have got before us now is a scheme which is both belated and provisional.
The last thing we want to do today is to delay any more the payment of these increased benefits. Having pushed the Government on for 12 months, at last successfully, in the matter of the main benefits, we are, indeed heartened to find that in that respect the Labour Party, even though in opposition, still decides the policy of the country. We shall, therefore, not oppose this Bill on Second Reading tonight, but we shall examine very carefully the scheme which the Government have put forward, and we shall propose Amendments in Committee. I will start that examination this afternoon.
First, the Minister claimed yesterday that in increasing the retirement pension, and the other benefits, he is going above its purchasing power as at 1946. But that all depends on what index number is used. I do not criticise the Interim Index of Retail Prices as a general guide. It is surely agreed, however, that food bulks larger in the old people's weekly

bills than in those of most of us; and it is food, including tea in particular, which has risen most in price in these last few years.

Mr. Gerald Nabarro: What about coal?

Mr. William Keenan: What about carpets?

Mr. Jay: The Minister has raised the retirement pension by 54 per cent. compared with 1946. Yesterday, he claimed that it had been raised by 50 per cent., but I will give him 54 per cent., which I think is correct. But retail food prices have risen by 65 per cent. since 1946. Here I will come to the rescue of the hon. Member for Kidderminster (Mr. Nabarro). The "Economist" for 4th December says that prices of food, fuel and clothing have risen by 70 per cent. since 1946. So it is far from clear that the retirement pension has, even now, recovered its full 1946 purchasing power.

Mr. Nabarro: If the right hon. Gentleman will look at the statistics again, he will find that the increase in the cost of fuel, mostly solid fuel—namely, coal—has been 50 per cent. greater than the increase in the cost of food since 1946, and coal is an essential element in the cost of living of old people.

Mr. Jay: What the hon. Gentleman should try to understand is that we are discussing pensions this afternoon, and the point that I was making was that, taking all that into account, the Minister has not fully restored the 1946 purchasing power.
When we reflect that, contrary to what we did in 1951, the rise in National Assistance rates this time is less than the rise in pension rates, and also that the insurance contribution attracts certain Income Tax rebates to those who are further up the income scale, it is clear that on this occasion the Minister is giving least to those who need most.
Secondly, we are far from convinced that the increase of 1s. in the employee's contribution is right or necessary. The effect is that the vastly greater proportion of all the new increased benefits at the start is being financed not by the Exchequer, but by the contributors themselves.
The Financial Secretary to the Treasury, in his very statistical speech


last night, argued that the contributors would find only £78 million in 1955–56 and the Exchequer £21 million; but he took a year, 1955–56, in which the contributions do not come into force until June. That is not a fair comparison. A fair comparison would be with the first full year.
The Financial Memorandum to the Bill—I am sure the Financial Secretary will pay respect to the Bill, because it bears, among others, the names of
Mr. Chancellor of the Exchequer, Mr. Secretary Lloyd-George, Captain Crookshank, Mr. Secretary Stuart …
—says that the total cost, including industrial injuries, of the new benefits in a full year will be £119 million. I hope that the hon. Gentleman does not dispute that. It also says that the total increased contributions in a full year will be £99½ million. That leaves only £19½ million to be provided by somebody else.
Since there is a saving of £13 million or £14 million a year—if that is wrong, perhaps the Minister will tell me, but I believe that it is right—in National Assistance, it follows that, even giving the hon. Gentleman the margin of doubt, there is £10 million at the outside in the first full year left for the Exchequer to provide.
All the figures that the Financial Secretary produced in a rigmarole last night could not possibly prove that £10 million is more than 10 per cent. of £119 million. So far from the "Daily Herald," which he attacked, being wrong in saying that the contributors are finding "nearly" 90 per cent. of what is needed for the old people, it was understating the facts, because it is actually more than 90 per cent.
In any case, if anyone is really puzzled over the figures—again, perhaps the Minister will tell me if I am wrong—let us look at the total benefits on the same basis. National Insurance and injuries benefits are to be up by £119 million in the first full year, and war pensions up by £15 million in the first full year. The Minister told us that in his statement on 1st December. Therefore, the total cost of the extra benefits is £134 million. But the total liability of the Exchequer—the Minister also told us this on 1st December, and I am taking his figures—will be about £25 million.
Therefore, it is clear, on the Minister's own showing, that the Exchequer is finding only £25 million out of a grand total cost of £134 million. We know that there are large amounts coming in later years by way of the Exchequer grant, but that is no reason for misrepresenting what will happen in the immediate years.
Let us contrast that with what was really done in 1951, and not with the caricature of it which the Minister gave us yesterday. The Minister seems remarkably ignorant of the principles of budgeting which have been followed by all Governments since 1945. Since Budgets now seek to balance saving and investment over the whole community, and to avoid either inflation or deflation, the elimination of the £145 million annual increase in the Fund, which was, of course, up till then a big item in the nations savings, had to be balanced by an increase of that amount in taxation. That is what was done in 1951.
That also applied to the £39 million increase in benefits in that year. Therefore, taxation had to be higher by both those amounts. Consequently, there was no "saving"—the Minister yesterday said "saving"—to the Exchequer or the Budget that year. As my right hon. Friend the Member for Leeds, South (Mr. Gaitskell) correctly said, the Exchequer, in fact, bore the whole extra £39 million of benefits in tax Revenue. The fact that the money did not pass through the Fund makes not the slightest difference.

The Minister of Pensions and National Insurance (Mr. Osbert Peake): Is the right hon. Gentleman arguing that, because in 1950–51 he was going to find £145 million less for the National Insurance Fund, the Chancellor had, therefore, to increase the taxation by that amount?

Mr. Jay: Yes, Sir.

Mr. Peake: That is surprising.

Mr. Jay: That was clearly explained in the Budget speech at the time, and it does not surprise anybody except the right hon. Gentleman. I am sure that the right hon. Gentleman was sincere in failing to understand that yesterday. But it is rather steep if, on account of his ignorance, he accuses my right hon. Friend of getting it wrong. People who live in economic glass cases ought not to throw stones.
The truth is—let us get it clear—that in 1951 the contributor was asked to find none of the higher cost of insurance benefits. But today he is asked to find, at the start, over 90 per cent. After all the glowing promises to the old people, at by-elections and elsewhere, that strikes some of my hon. Friends as rather bordering upon sharp practice this year.
What justification is there for the 1s. increase in contribution? The whole question of the division of cost here between general taxation, on the one hand, and insurance contribution, on the other, raises very deep issues of social policy. Progressive taxation falls more heavily on those with the larger incomes and the insurance contribution much more heavily on those with the smaller ones.
We cannot go into all these issues on the present Bill, although the Bill raises them, so I say no more than this today. I am a confirmed believer—more than ever—in progressive taxation, which has stood the test of time, and has been the main prop of social advance in this country. It was with that in mind that the Labour Government decided against an increase in the insurance contribution. But I am also a believer in social insurance benefits which are paid as of right, if possible without a means test, and at a flat rate regardless of income.
Therefore, I would ask any hon. Members who are tempted at first sight, as many of us are, by the idea of substituting either general taxation or a social security tax for the contribution, just to reflect whether they may not be jeopardising the whole principle of benefit as of right, and not subject to a means test.

Mr. George Thomas: Does this not apply in the case of family allowances, where there is a flat rate benefit and it comes out of taxation?

Mr. Jay: There is a clear difference in the case of family allowances. Though we all expect to grow old, we do not all expect to have children.

Mr. Aneurin Bevan: As has been said, we are to have a long-term review of the subject. I am sure that my right hon. Friend is not now prejudicing that review.

Mr. Jay: I said that we must have fuller discussions; indeed, I was going to say that we could not fully determine that

issue this afternoon. We have a contributory scheme before us and the immediate question is how much the Exchequer, and how much the contributor, should pay.
Our criticism of the Bill is that, for a makeshift Measure, it goes much too far in putting the cost on the contributor rather than on the Exchequer. It does this in three ways. The first, as I have said, is that the Treasury at the start is really doing very little for the old people at all, and has left itself with very little burden for the coming Budget. Secondly, the Minister, in our view, is quite unjustifiably making permanent—what we intended to be purely temporary, and to run from only 1951 to 1954—the alteration from one-fifth to one-seventh in the proportion which the Exchequer supplement bears to the total contributions. Thirdly, the Minister is arbitrarily raising the employees' and employers' contribution far beyond the actuarial figure.
The purpose of the change from one-fifth to one-seventh in 1951 was purely to meet the temporary problem of the piling up of an unnecessary surplus in the Fund. This was due to unemployment being, happily, much lower than Lord Beveridge had estimated, and to the fact that the additional number of old people, not covered by their own contributions, did not begin to push the expenditure of the Fund above its income until about the years 1954 or 1955. There is no purpose—I think this will be agreed—in piling up surpluses in the Fund, for this reason.
We cannot, in almost any circumstances, on the present principles of budgeting, draw down the reserve of the Fund in order to pay current benefits, without raising taxation to that extent. But if we do raise taxation it is more sensible to use the tax revenue direct to pay for the benefits. The Actuary pointed out in 1951—and we could not disagree—that it was wrong to use the Fund deliberately as a vehicle for national saving and not as an insurance fund at all. The only way of avoiding this was by a temporary change in the Exchequer grants.
The Actuary has himself always made it clear that this was intended to be temporary. Indeed, he says, about the 1951


Act, in paragraph 34 of his Quinquennial Report, this:
These amending provisions"—
that is, what happened in 1951—
could be regarded as an interim rearrangement of the amount and method of Exchequer support to the scheme, pending the Quinquennial Review; it was realised that the cessation of Exchequer grants was only a temporary measure and that they would again become necessary in future years.
In view of what the Minister said yesterday, I will also quote what I said myself when endorsing the 1951 changes, speaking for the Government, on 9th May, 1951. I said:
… these arrangements are all provisional, pending the 1954 general review of the working of the National Insurance schemes. …"—[OFFICIAL REPORT, 9th May, 1951; Vol. 487, c. 1967.]
On this question, the Minister himself, having already attacked the old-age pensioners' organisation the other day, yesterday attacked the T.U.C., and then went on to give a wholly misleading account, no doubt due to his defective memory, of the discussions that we had on this matter in 1951. We both agreed, then, that it was quite pointless to allow the Fund to pile up in the subsequent three or four years. Indeed, he said so himself on 26th April, 1951. I am sure that he will not deny it, but if he wants to deny it now, I shall be only too pleased to give way.

Mr. Peake: I quite agree.

Mr. Jay: The right hon. Gentleman said that it would be both dangerous and liable to abuse if the Fund was to pile up. The argument between us was purely on the book-keeping question of whether the money should be paid by way of the Exchequer supplement or the block grant. The total payments by the Exchequer into the Fund were practically the same for the three years, on the arrangement we agreed, as compared with the one previously proposed. Indeed, under the agreed arrangement, the Fund has actually increased since 1951. But one would not have guessed that from the speech which the Minister made yesterday.
Let us look at what the Minister has done to build up the 1s. increase in the employee's contribution, and so throw most of the initial cost on the contributor. First, he proposes, contrary to what

we intended, and contrary to what we now think right, that the Exchequer supplement should be maintained permanently, or at least for an indefinite period, at one-seventh. If, in fact, the proportion of one-fifth were restored, the Exchequer supplement would rise, according to my calculations, by 9d. The Financial Secretary, who is a better calculating machine than I am, said yesterday that it would rise by 8d. I think that I am right, but we need not argue about fractions of a penny.
Taking 9d. as the correct figure, this would enable the employee's and employer's contribution each to be reduced by 4½d. That would reduce—and this was explained last night by my right hon. Friend the Member for Fulham, West (Dr. Summerskill), who sits for the wrong side of the River Thames—the 1s. contribution to 7½d. But the Minister has also loaded on a large amount in excess of the actuarial figure. As he said, by the 1946 Act, it was provided that 2d. for the employee, which the Actuary calls the "margin," above the actuarial figure should be automatically added to the employee's contribution in 1951, to help in providing for the additional old people. But the Minister has now added another 6d. to that 2d., and that 6d., according to my calculation, is about £25 million a year, or a sum equivalent to the whole initial Exchequer charge for the whole of these benefits.
That 6d. is not mentioned anywhere in the documents before us. It was only yesterday, in his speech, that the Minister mentioned it. He accused us of lack of candour because we did not mention the change in the interest rate which benefited the Fund in 1951, but he has not been particularly candid to date about this 6d. The only difference between us seems to be that we do good by stealth, and he does harm by stealth. At any rate, we see no justification for this extra 6d. It means that younger contributors now are being asked to pay for older people's pensions. If we were to strike out that arbitrary 6d., the increase in the contribution required comes down from 7½d. to 1½d. And, that, I understand—and the Minister can say whether I am wrong—includes the extra 1d. which he is further adding on to the contribution, on the ground of industrial injuries.
For that penny we can find no actuarial justification at all. If there is one, perhaps the Minister or someone else will explain it in the course of the debate. When we analyse it, the case for the 1s. increase almost entirely disappears. In addition, the House should note, is the assumption of unemployment still at 4 per cent., which is higher than it has ever been since the war. Therefore, the Minister, in proposing the 1s. increase, has departed drastically from the principles of the 1946 Act in order to shift the cost on to the contributor. He claims to be restoring the 1946 purchasing power of the pension. If that is his argument, he ought also to stick to the 1946 principles of finance.
The House may well ask, how does the rather surprising result emerge that, apparently, we can have higher benefits, actuarially, without higher contributions? That is a fair question. The answer is to be found, although I think the House has not yet noticed it., in paragraph 49 of the Actuary's Report. Not merely has unemployment been lower since the war than was previously expected. But mortality, sickness and marriage rates have changed in such a way that the burden of supporting the older people at a decent standard will not be quite so great as we all feared even in 1951. We should surely all rejoice at that. It means that a more active and healthy population can more easily support the aged and needy. But surely the contributors themselves, not merely the general taxpayer, should share in the relief which is thus offered to us.
What the proposals of the Minister in this Bill do is to transfer almost the whole of that gain away from the contributors, who ought to have it, to the general taxpayer. We do not believe that is right or just, particularly if the Chancellor is to use that relief to give benefits to those with higher incomes in tax reliefs in the coming Budget.
The Minister has put us in a rather awkward position by publishing the Phillips Committee Report almost simultaneously with the Bill, but not basing the Bill on the Report. The Report is before us, and it affects all these problems. We cannot, however, fully discuss

it today. But since the raising of the retirement ages in due time to 63 and 68 would alter the whole principles which we are discussing, we ought to make a reference to it. I believe that one of the most vital and beneficial things that can be done today, in the whole field of social policy, is to remove artificial restrictions which prevent people able and willing to go on working after 60, 65 or any other age, from doing so. If we give the chance to such people to go on working, we shall be benefiting everyone, and not, as so often happens in this business, taking from one person to give to another.
We made a start in 1950–51 by abolishing the so-called normal retiring age in the public service, and inviting industry to do the same. My information is that the figures have changed a great deal as a result. The present Government, quite rightly, continued that policy by setting up the Watkinson Committee. I wish to ask whoever is to reply to the debate whether that proposal is being followed up? Is it still true that many employers—both public and private—for instance, I am told the banks and insurance companies—are still compulsorily retiring fit people at the age of 60 against their will?

Mr. Nabarro: The nationalised industries.

Mr. Jay: I said "public and private."
In spite of that, I also agree with my hon. Friend the Member for Houghton-le-Spring (Mr. Blyton) that no case has been made out for compulsorily raising the age at which the State pension becomes available. The Labour Government rejected that solution specifically in 1951. In my judgment, we ought to go very much further in pushing on with the voluntary campaign before we even seriously consider any compulsory change.
I would remind the House that side by side with the State insurance schemes which we are debating today, a great network of private pension and superannuation schemes is growing up. Usually, they are much more favourable to the contributor, right up to the so-called "top-hat" schemes, than is the State system.

Mr. Nabarro: Hear, hear.

Mr. Jay: I carry the hon. Member for Kidderminster (Mr. Nabarro) with me at last.
Often the private pension is not on a flat rate, but is dependent upon retiring income, with no earnings rule. Very often, as the Phillips Committee Report points out, it is available at 60, even for men. All that might be irrelevant to the National Insurance Scheme, if the private schemes were wholly financed out of private resources. But, of course, they are not. They are substantially financed by rebates from direct taxation. That is why the Tucker Committee had to be set up recently to produce a Report which appeared last year, and which we have never yet fully debated in the House.
I understand—again, the Minister can tell me if I am wrong—that the Exchequer is now contributing about £70 million or £80 million a year in tax relief to these private schemes. That is almost as much as it will be contributing at first under this Bill through the National Insurance system to a very much larger number of people.

Mr. Nabarro: Will the right hon. Member please put the matter into correct perspective by admitting, also, that the whole of the added cost of the employer's contribution at 1s. a week is a charge for purposes of computing the company's liability to Income Tax and Profits Tax and, therefore—in the aggregate—tantamount to an additional Exchequer subsidy?

Mr. Jay: I think the hon. Member means part of the ordinary firm's contribution to National Insurance—

Mr. Nabarro: The 1s. increase in contribution.

Mr. Sydney Silverman: It is not the case that the contribution by the Exchequer, to which the hon. Member for Kidderminster (Mr. Nabarro) referred, is, in the case he mentioned, a contribution not to the public, but to the employer in relief of his taxation?

Mr. Jay: Nevertheless, I think the substantial point is that about £70 million is going in tax reliefs to these schemes. This is a rather extraordinary situation. Apparently, at the moment, the Exchequer is spending nearly as much in

giving more favourable additional pensions to a minority of the population than it is spending on the whole of National Insurance.
I do not pretend to say today how we can tackle that great and growing problem. But I do say with emphasis that until it is tackled—or at least considered—we certainly must not either, in the first place, give big new tax reliefs to the private schemes; nor, in the second place, seriously consider raising the national retirement age compulsorily, and making the injustice to the State pensioner—which means largely the mass of wage earners—even greater than it is already.
Before very long we shall have to face the whole of this baffling problem, including private schemes, their relation to national insurance and, in the light of that, the whole basis of the national schemes. That might well be a bigger operation even than that of 1946. But I believe that in the end we have got to face it, because I should like to see this country continuing to give a lead to the world, as we have done ever since 1906, in the whole sphere of social security.
If we are to do that, and to seek to achieve real social justice in old age, we must somehow contrive that, throughout the whole system of private and public provision for old age and other times of need, not merely the method of finance, but the contributions and benefits, are made genuinely fair for all.

4.21 p.m.

The Joint Parliamentary Secretary to the Ministry of Pensions and National Insurance (Mr. Ernest Marples): I listened with great interest to the right hon. Member for Battersea, North (Mr. Jay), who presented his case with a moderation which was refreshing. I shall not join in the statistical duel between a former Financial Secretary and my hon. Friend who is the present Financial Secretary. Amidst all the welter of figures to which I listened yesterday, and in the right hon. Gentleman's speech, I am bound to recall the remark made by the hon. Member for Sowerby (Mr. Houghton), who said that figures could prove anything.
I remember, also, my first trip to the Continent. I got from the public library an old copy of Baedeker, which said,


"Beware of the waiters on the Continent their arithmetic is faulty and is seldom in favour of the traveller." This debate has proved almost exactly the same thing.
The first point raised by the right hon. Member for Battersea, North is the question of the retiring age. I have had some experience in private life, as an employee and as an employer, of the retiring age. Two principal questions are involved. The first one is: at what age does a man receive his retirement pension? The second question is: at what age is that particular man compulsorily retired from work against his will when he wants to continue in employment?
These are two separate questions. The second one is being dealt with now by the Watkinson Committee, which is still pursuing its inquiries. The Committee has sponsored the inquiry, "Reasons Given for Retiring or Continuing at Work," and I propose later to quote from the report of the inquiry.
This is a deep human problem, because it is wrong to make a man retire if he wants to continue working. The country and the economy need his services, and it is good for the man himself that he should not be thrown into retirement if he wants to continue, either manually or with his brain, working for the country.
The right hon. Gentleman entered into the controversy between the contributory system and the—

Mr. Jay: Before the hon. Gentleman leaves the other point, can he say whether it is true that the banks and insurance companies, for instance, are enforcing a compulsory age-limit of 60, and whether the Government are trying to dissuade them

Mr. Marples: I cannot say offhand, and secondly, I do not think the responsibility for that would rest with the Government. The encouragement would rest with the Government, but the actual responsibility would not. My own personal experience is that in my own firm, for which I worked and from which I drew remuneration before I took my present highly-paid office, we were always careful never to retire people, in the headquarters department at any rate, when they wanted to continue.

Mr. Robson Brown: To pursue the valid point raised by the right hon. Member for Battersea, North (Mr. Jay), can my hon. Friend give information regarding the policy of the nationalised industries towards compulsory retirement?

Mr. Marples: I could give that information; but what I am anxious to do this afternoon is to continue the hopeful sign which I saw in yesterday's debate. The hopeful sign which I detected was that the bitterness and acrimony which had marked the debates on the two Motions of censure had now been dropped.

Mr. Jay: Is that why the Minister, yesterday, attacked the T.U.C.?

Mr. Marples: I do not agree that my right hon. Friend attacked the T.U.C.

Mr. Jay: He spoke of the "T.U.C.'s ingratitude."

Mr. Marples: My right hon. Friend did no such thing. I detected yesterday that most hon. Members on both sides realised that this is a grave national problem which needs a great deal of thought.

Mr. Percy Shurmer: Why not give the benefits straight away? Thought it no good to the old people. It is the pension they want.

Mr. Marples: The hon. Member, who is very vocal today, was absent yesterday. He was not present during the whole of yesterday's debate.

Mr. Shurmer: Did the hon. Gentleman want me to interject yesterday?

Mr. Marples: If the hon. Member keeps quiet, I shall try to make my own speech in my own way without any help from the Birmingham area.
The second point I wish to mention is the controversy: the contributory system against taxation bearing the whole weight. I am really what is called a new boy in this field. Most of my life has been spent in "making the cake," in the productive sphere of industry, and this is the first occasion that I have spent a lot of time studying this redistribution problem. As a raw Parliamentary Secretary, which is what the right hon. Member


for Lewisham, South (Mr. H. Morrison) might call me, or a raw Joint Parliamentary Secretary, whatever it might be, it would be advisable for me to keep out of the difficult statistical morass into which we descended yesterday.
There are two different aspects to the problem of pensions. The first is the human problem of what a particular family or person, who, perhaps, has had hard luck and has not been successful, will receive. The second aspect is what I call the arithmetical side, which is the calculating machine—the Leo calculating machine, the "desiccated calculating machine" or simply the ordinary calculating machine. If we stress too much the human side, economists say that we have no head. If we stress too much the arithmetical side, the humanists say that we have no heart. I shall try to steer a middle course between the two.
I shall try to avoid too many figures, because the House would be bored and, more important, I might get bogged down in the figures. Secondly, I shall try to avoid the ancient controversies of 1946 and 1951, because during those years I was engaged in a controversy on housing, with the right hon. Member for Ebbw Vale (Mr. Bevan) and not on pensions.
Both the right hon. Member for Battersea, North and the right hon. Lady the Member for Fulham, West (Dr. Summerskill) sought to prove that the contributions were excessive; that was the gravamen of their charge, in support of which various figures were used. At one time the right hon. Lady got down to a figure as low as ½d. for the correct contribution; somebody said that it was 8d., and somebody else gave the figure of 7d. I want to look at this from the point of view, not so much of this House or of the actuaries, but from the viewpoint of the man in the street.
What will the man in the street think and say? What questions will he ask himself? He will ask himself, I think, "What do I pay in contributions and receive in benefits under this new scheme?" He will ask, "How does it compare with what I am paying now?" That, I think, is the question that the average man outside this House will ask himself. I have gone into these figures at the Ministry with great care, and I am surprised at the number of permutations

and combinations possible in an argument of this sort; I really am. I shall try to be as fair as I can, and if I fall into error, at least it will be a genuine inadvertence and not because I am trying to score a point.
I found that in 1946 the ratio of the contribution to wages was 3·9 per cent. Under this new Scheme it will be 3·2 per cent.

Mr. Albert Evans: Mr. Albert Evans (Islington, South-West) rose—

Mr. Marples: I cannot give way.

Mr. Evans: Earnings or wages? That is the point.

Mr. Marples: Earnings. However, I shall be obliged if the hon. Member will let me continue without interruptions, for they only disrupt my speech and make it disjointed, and will make it longer than it need be; and I know that there are many back benchers who want to speak.
The ratio of contributions to earnings under this Scheme is smaller than it was in 1946. That is the first point. The second point is that earnings, since 1946, have increased in the case of men by 64 per cent., whereas contributions are increased by only 33 per cent. Therefore, I do not think that the man in the street will consider the extra 1s. excessive. We may have all sorts of abstruse calculations, and the Opposition may be right in what they say, and certainly the right hon. Lady the Member for Fulham, West was most reasonable in her speech yesterday, but the estimates of what the amount of contribution should be, varied on that side of the House between ½d. and 10d. [HON. MEMBERS: "No."] I believe that the average man will willingly undertake a contribution of 1s. to benefit by this Scheme.

Mr. Shurmer: Mr. Shurmer rose—

Mr. Marples: I cannot give way, though if the hon. Gentleman had been present yesterday perhaps I should have given way today.
It may be argued that the calculation is on average earnings. That is a valid point. The question may be asked, what about the lower-paid workers?

Miss Irene Ward: Hear, hear.

Mr. Marples: I am grateful for the support of my hon. Friend.

Miss Ward: My hon. Friend ought not to be too sure what it is.

Mr. Marples: If my hon. Friend will look at the Ministry of Labour earnings indices for the lower-paid workers she will find—and I am willing to talk to her about them some time—that the increases in the earnings of the lower-paid classes are proportionately greater than the percentage increase in contributions. Therefore, the lower-paid worker, too, as well as the worker with average earnings, does reasonably well out of this Scheme.

Miss Ward: What about the self-employed?

Mr. Marples: I am coming to the self-employed later. I am now talking about the employed person.

Mr. Shurmer: Before the hon. Gentleman runs away from that point—

Mr. Marples: I do wish the hon. Gentleman would allow me to make my speech in my own way. I do not think it is unreasonable to ask that of him.

Mr. Shurmer: I just want to put a point—

Mr. Marples: The hon. Gentleman is usually most fair, but on this occasion I do not think he is acting up to his usual standard.

Mr. Shurmer: I wanted to ask the hon. Gentleman a question about wages before he leaves that matter.

Mr. Marples: Contributions are being increased by 33 per cent, over 1946. What are the benefit increases? Standard benefits are being increased by 54 per cent., so the man in the street will say, "I am paying 33 per cent, more and I receive 54 per cent. more, so I have not got too bad a bargain." I have tried to get the percentages right.
One thing is certain. The interpretation put on the 1s. contribution by the hon. Member for Coventry, East (Mr. Crossman) in that great Sunday newspaper, the "Sunday Pictorial," last weekend was not accurate.

Mr. Nabarro: It never is.

Mr. Marples: The hon. Member for Coventry, East set out his argument

reasonably well. He gave his points for the Bill and then his points against it, and then he drew his conclusion, which was that the 1s. contribution would be regarded by the average man in the street as 1s. cut in wages. If a person pays 1s. a week and gets benefit of approximately 2s. 4d.—over 2s., anyhow—I do not think that by any stretch of the imagination that can be called a cut in wages.

Mr. Shurmer: He does not get that benefit.

Mr. Marples: He certainly does.

Mr. Shurmer: He has a long time to wait for it.

Mr. Marples: He either gets the benefit or he does not get the benefit, and I believe that he gets the benefit. If the hon. Member thinks he does not get the benefit, I would ask him what about the unemployment and sickness benefits, and the maternity grant?

Mr. Nabarro: What about when he is injured at work?

Mr. Marples: And he gets benefits for industrial injury, as my hon. Friend reminds me.
My hon. Friend the Member for Tyne-mouth (Miss Ward), and the hon. Member for Mansfield (Mr. B. Taylor), in his winding-up speech last night, asked about the self-employed.

Mr. James Griffiths: My hon. Friend the Member for Mansfield (Mr. B. Taylor) has had to leave the Chamber for a short time.

Mr. Marples: I quite understand.
The hon. Member for Mansfield, in a most reasonable speech, pointed out that there is a large number of deserving classes of people who are self-employed, such as small shopkeepers, and craftsmen, such as joiners and cabinet makers, who start on their own and who are just as skilled and who are performing just as useful jobs as men working for building contractors. There are also the crofters, and I have learned that the right hon. Gentleman the Member for Llanelly (Mr. J. Griffiths) was always concerned, naturally about the hill farmers in North Wales, who are also self-employed. I am glad he was. Almost, but not quite, every hon. Member of this House is considered to be a self-employed person.
I was astonished to find I was a self-employed person paying this large contribution. In the past, in my view, and in the view of my right hon. Friend, the self-employed person had what I would call a raw deal. It was a raw deal for this reason, that the Exchequer gave as a supplement only one-sixth of the contribution which the self-employed person paid. That, under the proposals of my right hon. Friend, is altered. The employed person pays his contribution and gets one-third of the amount from the Exchequer. In the future the self-employed person will pay his contribution and he too will get one-third from the Exchequer, and, therefore, the two are brought into line, and each gets one-third on the contribution he makes.

Mr. Bevan: Is it not also a fact that the ordinary workman was asked to pay a far higher contribution because the Actuary overestimated the incidence of unemployment?

Mr. Marples: I am not sure about that erudite point. The main point is that if a self-employed person makes a contribution, the Exchequer, as is only right, in my opinion, will pay the same proportion to him as it pays to the employed person.

Mr. Bevan: The point I was making was an entirely different one. When the Actuary considered how much contribution the self-employed should make and, therefore, how much supplementation the State should find, as against what the ordinary workman should pay and what the Exchequer should pay in his case, he grossly overestimated the incidence of unemployment among the workers and put up the worker's contribution.

Mr. Marples: In 1951, the adjustment really upset the balance. However, I am glad to see that the right hon. Gentleman has implicit and great faith in actuaries.

Mr. Bevan: No. The opposite.

Mr. Marples: We shall remember that in future debates, because the right hon. Gentleman has spent a large part of his political career saying things about actuaries—

Mr. Bevan: The opposite.

Mr. Marples: —at various public meetings, and on this occasion he chooses to have on his side a desiccated calculating machine.

Mr. J. Griffiths: As I understood what the hon. Gentleman said, the Government, by the Bill, are increasing the proportion which they pay from the Exchequer to the self-employed from one-sixth to one-third. What is the estimated cost of it each year?

Mr. Marples: I cannot say offhand what is the estimated cost, but I will see that the right hon. Gentleman gets the figure before he makes his speech, so that he will have the information available.

Mr. Griffiths: I thank the hon. Gentleman very much.

Mr. Marples: It is impossible to carry all these figures in one's head—

Mr. Griffiths: I quite agree.

Mr. Marples: —especially when one has only just come to the Ministry.
The provision is in the Bill. The intention is that this proportion should be roughly one-third. Actually, the total is 7s. 7d. at present. Under the provisions of the Bill the total paid by the self-employed, including Members of Parliament, crofters, and so on, would be 8s. 5d. of which 10d is for the National Health Scheme, making 7s. 7d. for insurance. One-third of that is roughly 2s. 6d., and it is 2s. 6d. which the Exchequer will now pay, whereas prior to this Measure the Exchequer paid 1s. 1d. In contributions the average man in the street—

Mr. Shurmer: Mr. Shurmer rose—

Mr. Marples: No, I cannot give way. I have been almost 20 minutes making a single point and yesterday the Opposition taunted my right hon. Friend with taking 70 minutes over his speech and he had innumerable interruptions.
The Bill is concerned with the rates of contributions which are to be made, the benefits which are to be paid out, and the time-table. There has been criticism of the time-table. There was criticism by the right hon. Member for Battersea, North. It has fallen under two heads. The first has been on a question of policy, to the effect that the Bill should have been introduced earlier. The second criticism takes the form of asking us to speed up the administration. We are asked why it should take so long and whether we cannot do this job more


quickly. Almost every hon. Member opposite has suggested that and so have two newspapers in leading articles—today's "Daily Herald" and yesterday's "Manchester Guardian." What Manchester thinks today the "Daily Herald" thinks tomorrow.
The Bill was introduced at the first possible moment after the Quinquennial Valuation. If it had been introduced before, no one would have known what charge to make and what benefits to give. That would have been irresponsible, since that review was expected. Therefore, we waited for it. It was the Act introduced by the right lion. Member for Llanelly that laid down what should happen quinquennially and my right hon. Friend has done nothing more than carry out what Parliament passed in 1946.

Mr. Jay: I want to put a specific question.

Mr. Marples: No, I cannot give way.
As far as policy is concerned, this is the earliest possible moment at which the Bill could have been introduced. As to administration, there have been two suggestions. One is that a sum should be paid before Christmas. That was the suggestion in the leading article of the "Daily Herald" today. The second is that we should speed up the procedure under the Bill.
I must confess that I sympathise to a great extent with the views formed by hon. Members opposite and the public. When I went to the Ministry I thought that payment before Christmas might be possible. For that reason I asked my right hon. Friend if I could make certain inquiries. I then went round personally to those places where the men did the work, where the pension was paid and the book was received. I found when I was on the Opposition benches and was concerned with housing that that method paid handsome dividends. Just after the war I started researches into what happened at the building sites and worked back to policy in Whitehall. I did not go the other way about it.
I did the same in this case. I personally visited a post office in the rush hour and went to the Stationery Office where the stamps are produced and only then to Whitehall. My conclusion was that

whatever was desired and might be considered the right thing to do it was quite impossible to do it before Christmas. I shall relate some of my experiences in a moment.
The second point is that the proposed procedure is the quickest procedure possible consistent with safety. It is difficult to convey this point in debate and argument and therefore I make an offer to hon. Members opposite. I went round and my visits converted me to the view which I have just given. I ask any hon. Member opposite who thinks it is possible to do something before Christmas to come with me next week. I will take him with me on a similar tour so that he may see what happens on the spot where the man does the job. He can then make an assessment and apply His own judgment to the problem.

Mr. Keenan: Why did the Government not start on this 12 months ago?

Mr. Marples: I could not make a fairer offer.

Mr. Shurmer: Mr. Shurmer rose—

Mr. Marples: The hon. Member for Sparkbrook (Mr. Shurmer) must be getting exhausted by now. He will be drawing sickness benefit if he bobs up and down much more. If the hon. Member will come with me next week, or better still tomorrow morning, I shall be delighted to take him round so that he may apply his great wisdom and sure judgment on the spot.

Mr. Shurmer: I go into post offices very often and see old-age pensioners drawing their pensions. There would be no difficulty in stamping an extra 5s. on the pension book.

Mr. Marples: I will take the hon. Member tomorrow morning to see the trade union officials of the men on the spot and he can argue the matter out then.

Mr. Shurmer: I thank the hon. Gentleman for giving way. He tells us that he has been to a post office. We are claiming that something should be done for old-age pensioners before Christmas. The old-age pensioners have to pass their books over. Therefore, what difficulty would there be about stamping 5s. on each slip torn out of the book? There is no difficulty at all. It takes no time.

Mr. Marples: That is what the hon. Member thinks. That is not what the trade unions of the various interested workers think. The hon. Member is quite at variance with the official trade unions whom we have consulted. If I cannot convince the hon. Member by argument, I hope that he will come with me tomorrow.

Mr. Harry Wallace: Which trade unions?

Mr. Marples: There are several unions, among them the one representing sub-postmasters.
I do not think that I have been controversial, but I am bound to refer to a leading article in the "Daily Herald" this morning, which states that the Government
should tell the Post Office to pay the increase immediately on the present pension books. There is no reason on earth for making the old people wait until April.
I would ask only two questions of that leader writer. Has he consulted the trade unions concerned?
I tell the hon. Member for Sparkbrook that on various Bills which the Ministry introduces from time to time trade union representatives are consulted about programmes. I will not call them the backroom boys, but they are the people who do the hard graft of the trade unions and carry out a tremendous amount of work which the average man in the street does not realise—and not every hon. Member of this House. The trade unions are always consulted on major operations of this kind, and they have been consulted by the Ministry about our programme in this case. I ask the "Daily Herald," an organ which is supported by the trade unions, "Did you ask the trade unions whether they think this is right or not?" We have pressed the trade unions as hard as we could, and we ought to thank them for the way in which they met us on this problem.
I went to the post office at Battersea Rise. It is a general post office. I believe that there are 23,000 sub-post offices. They are the people who sell aspirin, "Daily Heralds," "Daily Mirrors," "Daily Workers" and that sort of thing as well as stamps. There are just under 2,000 of the general post offices.
At the Battersea Rise Post Office I found that roughly half the work was concentrated into Thursday and Friday, and the major portion of it occurred in the mornings. It was extremely interesting to watch the counter-clerks at work dealing as fast as they could with 36 different types of order books and rates of pension. After questioning them, I do not believe that it would be possible to carry out the scheme suggested in the "Daily Herald" and the "Manchester Guardian."

Mr. Jay: Since the hon. Gentleman has mentioned my constituency, I must tell him that the Battersea Rise Post Office is not in it. Does the hon. Gentleman not understand that our criticism of him and the Minister is that they did not introduce the Bill months ago? Will the hon. Gentleman now, if he can, answer my specific question? Was the Bill in print on Monday, 29th November, or was it not?

Mr. Marples: I am extremely grateful that the right hon. Gentleman accepts that what has been suggested could not be done in an emergency before Christmas. That is something, at any rate.

Mr. Jay: I did not say that. If the hon. Gentleman misrepresents what I say, I am compelled to interrupt him. I said that our main criticism is that the Bill was not introduced months ago.

Mr. Marples: That is an entirely different point from the one the right hon. Gentleman made earlier. I am sorry that the post office I visited is in a part of Battersea outside his constituency; I will not say "a more fortunate part of Battersea," because that would be controversial.
I now want to deal with the sickness benefits from the point of view of the National Insurance offices. Every hon. Member who has been an employer or an employee will know that sickness incidence in the winter months is greater than in the summer months. The offices are staffed to deal with the normal volume of work. If there should be a sickness epidemic, two things happen; the office staff is reduced, and the volume of new claims increases. I will give hon. Members the sickness rate for last week and that for the corresponding week in 1953. In 1953 there were 137,000 new


applications for sickness benefit. This year there have been 180,000. That is an increase of almost 50,000 compared with last year; it represnts an increase of almost one-third in the volume of work.
Rather than quote only national figures, which are misleading because of their magnitude, I went to a certain local National Insurance office, where I found that one in 10 of the staff were away sick. That meant that the remaining nine-tenths had to deal with one-third extra work.

Mr. S. Silverman: Oh, dear!

Mr. Marples: The hon. Member for Nelson and Colne (Mr. S. Silverman) says "Oh, dear!" He and other people perhaps think that the staff of that office should have superimposed upon that difficulty the task of altering about 10,000 pension books a week. I am not without some knowledge of administration, and my honest opinion is that it could not be done.
I mean what I am saying very sincerely (indeed. I am not speaking from a Civil Service brief today. I am expressing my own convictions after having investigated all the possibilities. When I was in Opposition I staked my reputation, to some extent at any rate, on the ability of the Conservative Party to build 300,000 houses a year, which was considered to be optimistic. I would not stake my reputation on the possibility of reducing the period of time contemplated by my right hon. Friend in this Measure before the increases can be paid. It may be that I can be proved to be wrong, but that is my honest conviction after a personal investigation.
I look at the time-table from this point of view—at what date do we announce the increase and at what date do we give the pensioner his money? I do not think the pensioner knows anything about Second Readings, Committee stages or Report stages; generally speaking, all he is interested in is when the increase is announced and when he gets it.
The 1952 operation took 29 weeks, from 11th March to 29th September. We are proposing to take only 21 weeks this time, and that is from 1st December, 1954, to 25th April, 1955. It will be 21 weeks from our saying to the pensioners

that they are to have an increase to the time when we give it to them; that is an improvement on the 29 weeks taken in 1952. When the difficulty about the sickness benefits is taken into consideration, I am sure that hon. Members will realise that that is not an unreasonable period.
I have looked at the contributions from the points of view of the man-in-the-street. I have taken the point of view of those engaged in the administration who do the work. Now let us look at the pensions from the point of view of the pensioner. I will give some examples of what happens under the Bill.
Let us first take industrial injuries, in which so many hon. Members opposite are interested. Let us take the case of a married man, with a wife and two children, who is in receipt of 100 per cent. disablement pension, being unable to work, and getting at most, with family allowances, £6 10s. per week. As a result of the Bill he will get £7 15s. 6d. per week. In annual terms he will get £405 as against £338 at present, that being an increase of £67 a year on £338. Take the same family on sickness benefit, the breadwinner being away from work. The amount to be provided, including family allowances, will be £4 4s. per week, which represents £228 per year, compared with £195 per year at present. Also, a retirement pensioner, with a wife, who now receives 54s. per week, will get a total of 65s. per week.
I have dealt briefly with the contributions, the timetable and the benefit. I now want to say a few words about the wider issues to which reference was made yesterday, which are certainly germane to insurance and social benefits although there is no allusion to them in the Bill. I speak here as a newcomer, and a newcomer can often see the wood through the trees, whereas those who are not newcomers see the trees only. The problems which the subject poses are extremely fascinating and would make a most interesting study for anyone. I never thought that I should be quite as interested as I have been when I have discussed the long-term prospects. I endorse what the right hon. Lady the Member for Fulham, West said yesterday in her moderate opening speech.
I am not sure whether the hon. Member for Islington, North (Mr. Fienburgh)


is present at the moment. I had intended to refer to him, because he wrote an article about the two Motions of censure. He does not appear to be present, and so I had better not refer to him now, but in the article he said that the only good thing was that the Labour Party hated the Tory Party more. I will not reproach him for that, but I believe that these problems are of such a magnitude that unless we start decreasing the stock of hatred and increasing the stock of wisdom, we shall never solve them.
I want to throw one or two ideas of my own into the discussions which the right hon. Lady envisaged. She said that this was an interim Measure. All Measures passed by this House are interim ones. If they were final Measures we should close up shop, because there would be no need for us to be here. As long as we have progress, every Measure must be an interim one. The 1946, 1951, 1952 and 1954 Measures are all interim Measures. The thing that has always impressed me is the growing number of industrial pensions. Three out of 10 people who draw National Insurance pension have an industrial pension in addition. The right hon. Member for Battersea, North made that point. I have found the difficulty that when a civil engineer wants to transfer from one firm to another because he can get a better position, he is often prevented from doing so because he cannot transfer his pension rights. I have known quite a number of skilled engineers Who might have rendered greater service to themselves and to the country who were stopped from moving because of that provision. That is a problem which deserves careful thought from both sides of the House.
In the heat of the discussion of the Phillips Committee's Report, I would ask hon. and right hon. Gentlemen not to overlook the report which has been recently published on the subject of why people retire. It is extraordinary to see what is thrown up by that Report. Every time one reads it a new fact seems to come out. Some of the facts I got last night from it after leaving this House were that 51 per cent. of the single men retire on reaching 65 years of age, while the proportion of married men was only 39 per cent. I do not know why that is. Perhaps married men have better health, or there is greater pressure behind

urging them on. It may be that they want to get away from home. I would not know. Single men showed substantially more ill-health than married men. The proportion of single men going to work after 65 is lower than that of spinsters at 65, which comes out at 65 per cent.
We ought not to exclude the subject of taxation from our discussion of the long-term problem. There is a limit to the taxation which any nation will accept at any time. This must be the effective limit to our social services. That is not my statement but one made in one of the books I have been reading on the reform of social security. It is an interesting Fabian research pamphlet. We have to watch carefully the taxable limit in this country, because beyond a certain point people prefer inflation to taxation. If that happens, we shall hit the very people we are trying to help. When I first came to this House, my right hon. Friend who is now Chancellor of the Exchequer read a letter from a constituent who asked for some benefit, and said, "Please see that it is paid, not by the ratepayers or the taxpayers, but by the State." In this House we know that the money has to be paid by the taxpayers.
I apologise to the House for keeping it for so long. Let us get this matter into perspective. This is a major Bill. The "Daily Herald" said it was a major Bill. The day after my right hon. Friend announced the Bill, the "Daily Herald" said, before it had time to think and to get the party line settled:
The plan is a major operation. It will be open to criticism on points of detail, but it makes reasonable provision for need, having regard to its insurance basis.
The benefits proposed by the Bill are the best ever offered. The Bill is an investment in the future and is a great step forward. It is one of the greatest increases of all time, but I hope that it will not be the last. If we all work together in the House, as we probably shall after the Bill becomes an Act and the spirit of censure has gone, we can move forward in what we all agree is a worthy cause.

5.5 p.m.

Mr. Aneurin Bevan: I promise the House that I shall make my speech as short as possible, because I know that a great many Members want to speak. Fortunately for us on this side


of the House, a great deal of what we would otherwise have said we need not say because of the wholly admirable speech made yesterday by my hon. Friend the Member for Houghton-le-Spring (Mr. Blyton), who gave us so clear a statistical history of this question that there is no need for us to involve ourselves in a spider's web of figures.
I would say, in passing, to the Parliamentary Secretary, without any desire to be offensive, that he could have shortened his speech quite a bit, as he will see if he looks at HANSARD tomorrow, by cutting out a large number of idle sentences in which he said what he was going to say without saying it.
The great difficulty that some of us feel in this debate is that we have been led into a false position. That applies not only to the House of Commons but to the Trades Union Congress. We have been told by the Minister that this is a major Bill. Of course it is a major Bill. We have been led to believe that it was going to be not a major Bill to follow the quinquennial review but a stop-gap Measure to deal very largely with the subject of pensions. Now, of course, we are caught. We are having a major Bill before we have an opportunity of studying the major report.
The major report is not the Actuary's Report. Many of these figures were known before. Indeed, the Minister cannot plead in aid the Actuary's Report, because he has entirely ignored it. We have only to look at that Report to see that the figures suggested by the Actuary for the purpose of financing this increase are far less than the Minister has put into the Bill. The Minister cannot say that he needed to have the Actuary's Report unless he intended to ignore it.
The Minister has not founded the Bill on the Actuary's Report but upon a piece of politics which has no relationship at all to all these complicated calculations that have been thrown at us yesterday and today. There is a danger that all of us are being tempted to believe that we are dealing with insurance. We are not dealing with insurance at all, and have not been dealing with insurance for a very long time. Everybody who looks at the matter realistically can appreciate that. We have used the figures and the words, and the old totem phrases and

calculations about what the Fund would bear, and have asked, "Is it being funded or not? If it is to be funded, who is going to fund it, and on what date?"
All these things have no relationship at all to the Bill. There is no such animal as "the Fund." It does not exist. It is a pure myth. We have spoken about it annually from year to year. The Minister himself has said, "We do not want to have the Fund too big or people will ask why they cannot have some of it." The Fund is not there. Let us get behind these figures to the actual economics of the situation; but before we do that, let us try to get rid of this bunkum about insurance.
In an orthodox point of view, insurance is a sum of money which is paid by an individual to somebody else in return for certain rights to other amounts at certain dates. That contractual relationship is established between the person who insures himself and those by whom he is insured; that is normal insurance. If one of the parties tries to jilt on the transaction, the court is there to arbitrate. That is the ordinary contractual relationship. Once the State becomes a third party to such an arrangement, the ordinary conception of insurance is immediately modified. The State is a sovereign body and can alter the terms of the contract when it wishes without asking anybody. It did it in 1931, and it has done it over and over again. Therefore, to use the same terms for these two situations is plain bunkum.
Immediately there is a third party, the State, which, by its legislative authority, can alter the terms of the equation, it is no longer insurance in the ordinary, accepted sense of the term. No one, I hope, in the House will deny that proposition. In fact, it has already been suggested that we might ourselves arbitrarily change one of the most fundamental tenets of the scheme by altering the age of retirement. That has been seriously suggested by the Phillips Committee—and I am very glad indeed that no serious public person has yet given his approval to it—so that the position arises that contributions are collected from an individual of 16 years of age onwards on the assumption that he has a certain entitlement when he retires at 65, but in the meantime, without asking him, the age of retirement is changed to 68.
Has anybody here seriously suggested that that is insurance? Is there anybody else who has seriously suggested that that is what might be called entitlement as of right, which is another totem word we have heard over and over again, asserting that we have insurance contributions to make and that we have an entitlement as of right? But what about that right? That right may have been modified by a change in the age, so that there is no contractual relationship there.
Furthermore, by the normal process of economic development we are continually destroying the value of the benefit by allowing monetary inflation. We cheat them all the time so long as the contract is expressed in terms which themselves are variable. The contract is invalidated so long as it is expressed in money terms which are not readjusted to ensure that the person is not cheated. That is not insurance in any proper sense of the term. That is not legal entitlement.
What is far worse in this field is that, in a case of normal inflation, the value changes. When I speak of normal inflation, I do not mean inflation in the present accepted economic sense of the term, in which too much money is chasing too few goods and there is a continual fall in the value of the reckoning factor. We know very well that there has been in that sense a progressive fall in the value of money over the last few hundred years, accompanied by a rising standard of living. That is not what I mean, but rather the erosion of the calculating medium. In the case of people living on fixed incomes, especially people living on insured benefit, what we have been saying is that there should be built into this system a protection against a variable figure in order to see that the individual is not cheated. This the Government have not done.
We have not said—and by "we" I mean the party to which I belong—that we are wedded to the 1946 standard. We have not said we are wedded to the insurance principle in respect of the quinquennial review. What we have said is that experience has now shown that there should be built into the social security system of Great Britain the principle of the maintenance of the value of money from time to time so that the poor old-age pensioner should not have to come

to the House of Commons to lobby, should not continually have to agitate, should not have to look at cartoons in the newspapers displaying his plight, and should not have to exert himself merely in order to stand still. That is what we have said. Is there anything wrong with it?
We have been asked what we did about it, and that is a perfectly fair question. In 1946, in the general climate of that day after the Beveridge Report, the old totem of the insurance principle bemused practically every mind, including our own. Today hon. Members opposite are still advocating the same ancient, old gospel, and we know it is out of date. Therefore, what we are saying in 1954 is, is it not a reasonable, civilised and scientific thing to try to maintain the value of money for the old-age pensioners? What we are suggesting is that there should be built into the system of social security the principle of autonomousness by which the value is automatically adjusted as the cost of living rises.
From that point of view we get what the Prime Minister called the floor below which the citizen cannot drop because we are taking steps to strengthen the floor when it tends to get weak through rising prices. It seems, therefore, to us to be sensible to say that, if there is going to be a quinquennial review, this principle should be built into our social security system.
Next, we not only believe in that principle but we believe that there should be a refinement so that when we are speaking about this class of persons there should be an increase which is really for them. A general increase is not really for them. It has already been agreed on every side that the general rise has been less than the rise in the price of food. In other words, the narrower range of commodities consumed by the older people and the sick is rising more than the general range. Therefore, we should have a special increase for the sick people, the old-age pensioner, and those who are beneficiaries of the social security system. As to how it should be revised is a matter of discussion, and whether the revision is every six months or every year, I do not mind.
I have been asked, "Oh, but suppose prices fall?" There is a complete and


full answer to that. If the cost of living falls we shall need the increased consuming power of the people to maintain full employment. The Coalition Government during the war brought out a White Paper dealing with the possibility of post-war unemployment, and the late Mr. Ernest Bevin, in introducing the White Paper into our discussions, said that the Government had come to the conclusion that if there were unemployment in prospect the contributions of the insured worker should be reduced in order to maintain increased purchasing power to keep the circulation of goods going.
If, therefore, there were at the first stage a general fall in prices, which would indicate the onset of a deflationary situation, the actual maintenance of the purchasing power of these social security benefits would be one of the best ways of preventing unemployment and we would be perfectly safe from any economic point of view.
I would go further than that. I would take a certain range of National Savings certificates and give exactly the same terms to those, because in my opinion there is no justification for cheating ordinary people who have not invested their savings. We cannot speak of the ordinary man and woman who buy National Savings certificates as investors. He or she is a saver. They are not doing it as speculators, but because they want money when in need, and they look forward to it. But they are being cheated now because, when they come to spend it, it is of far less value than when it was paid in.
What I mean by defending the £ sterling is defending its purchasing power in the pockets of the people. What we ought to mean by defending the value of sterling is that people ought to be able to predict its value sufficiently far ahead and not be cheated by circumstances over which they themselves, and quite often Governments, have no control. That is an advance we should soon be able to make.
I do not want to be long—

Dr. H. Morgan: You are doing well. Teach them sense.

Mr. Bevan: —but I want to say one more thing. If it is true that what we

have come to regard as insurance is not insurance, it is even less so when it is universal. One can talk about insurance when one talks about group insurance, but society does not insure itself, except in one way. The universality of social security in Great Britain completely destroys its insurance character.
From that moment one can speak of ways of getting revenue only as different forms of taxation. They are no longer contributions and they are no longer actuarially calculable. All the actuaries have been wrong and nobody blames-them, because they were asked to prophesy the curve of unemployment. They have been proved absolutely wrong, and I do not blame them.
In 1945, how many people in Great Britain would say that at no time would the unemployment figure—except at one short time—ever rise above 2½ per cent.? But the actuaries at that time said that we must reckon on 8 per cent.

Mr. Marples: The Government, not the actuaries

Mr. Bevan: If the hon. Gentleman would look back to that White Paper on unemployment, he will see that that was what the back-room boys were saying. The Government have estimated 4 per cent. They know very well that even that is crystal-gazing, there is nothing behind it. We have all learned—especially the party opposite—that the ridiculous notions that they had in the inter-war years, and to which they held with stupid ignorance for year after year, have now been proved to be quite wrong. One cannot have general controls over the total volume of employment, unless the general controls are properly organised. But having general controls is a proposition different from having specific controls, and it is to that that I want to come.
The only way one can save for one's ageing population is by investment. One takes from the population a certain amount of spending power and diverts it into building up those industries which are to be needed when a larger proportion of the population is idle and wants to live on that. That is what saving is. It is not sticking it in the Fund.
When we discussed this in 1951, it was suggested to the then Chancellor of the Exchequer that we could quite easily


provide for the charges on the National Health Service by taking some money from the Fund, which was then about £1,250 million. Colossal. Those who looked upon these matters from the orthodox angle said, "If you have £1,250 million, why on earth do not you take some of it?"
My right hon. Friend the then Chancellor of the Exchequer quite rightly said—and I supported him—that it was not there. There was not a brass farthing except for the working capital. It is not there now. Where was it? It was in power stations which we were building at the time—more than were built before and more than have been built since—and steel works. This is not a matter for laughter, because one of the greatest difficulties about this argument is that not only does it not educate the population but it mis-educates the population.

Mr. Nabarro: Mr. Nabarro rose—

Mr. Bevan: Let me finish my argument. The hon. Member must not imagine that if he laughs he can interrupt as well.
One of my hon. Friends was quite misled in suggesting the use of the Insurance Fund as a form of saving. That is what it is. If it is not a form of saving, it is nothing. We are collecting contributions from the population and diverting them into industries and expanding the industrial base of the British economy so that in later years, when more people are idle and sick, light industries can be based upon the heavy industries to maintain those people.
That is the only way in which society can save in any proper sense of the term, and that is what we have been doing. So it is no use arguing that we are doing anything other than extracting purchasing power from the population in the form of contributions and hoping—and we have not much hope from that side now—that these savings will be converted into the expansion of British industry which will be available for people when they are old and want to live on the result.
The Conservative Party is planning benefit and not at all planning investment.

Mr. Nabarro: Much bigger investment, though, than under a Socialist Government.

Mr. Bevan: That is a very good interruption, and it is a point I was about to make. One can have—and this is one of the difficulties of the situation facing all parties—an increase in the global quantity of production and still not provide sufficient for old-age pensioners. One can have a general expansion of production and still find oneself short of those products upon which the old-age pensioners will want to live.
Is that not exactly what is happening with tea? We have an index of production to show that we have plenty of television sets for the old people to look at and less cups of tea alongside the television sets. That is exactly what has happened.
One has an increase of global investment so that the clever economists can complacently write about how well we are doing. At the same time one can have a failure to stimulate those parts of the economy on which one's social security beneficiaries will live.
So one requires not only to take this money but to canalise this investment in the right direction. It means not only global control over the economy, but directional control in particular ways. It means qualitative controls as well as quantitative controls. Unless modern society does that, it will have a great lack of balance between some commodities and other commodities.
All over the world people who are most competent to talk on this subject are telling us that, apart from the temporary excess of world supplies in North America, the world faces grave food shortages over the next 25 years.

Mr. H. A. Price: More crystal-gazing.

Mr. Bevan: Indeed, hon. Members opposite were commending themselves to the country by what they considered their ample contribution to deal with it. Unless they are serious about that, they had better shut up. We are, therefore, dealing merely with a form of taxation.
I speak as a person who has been associated with the mining industry all his life—as a miner, a miners' official


and, today, a miners' Member of Parliament. [Laughter.] We have been discussing this matter very seriously and hon. Members opposite need not laugh. The mining industry says, "Why should there be a form of taxation for social security benefits which falls most heavily upon the extractive industries?" It is because the proportion of wages to fixed capital in the extractive industries is higher than elsewhere. The more manpower and womanpower in an industry, the heavier its contribution. The fewer an industry employs, the less it pays.
Why, therefore, should not the revenues for social security be found in the most equitable, the simplest, the most scientific and the cheapest way—by taxation—rather than in a way which causes us to employ between 25,000 and 30,000 civil servants licking stamps and keeping records, just like the lunatics who win wars by sticking flags on to maps? It is an entirely unnecessary exercise to keep all those records when anybody knows that everybody is in the Fund. If everybody is in there is nobody outside to inquire about. It is perfectly true that so long as differential benefits are related to differing circumstances, those records must be kept in order that details of certain people can be looked up, but would it not be simpler to get rid of the anomaly and pay the additional money that would be saved to the people who are denied benefit because their insurance records show that they have not been contributing long enough, and who require only half the number of people to investigate their position?
Whether we consider this as a long-term or short-term Measure, the Government should think again. They can quite easily alter the Bill. They can leave the benefits as they are and bring in their long-term Measure in six months' time. There is ample money in the Fund to meet the increases in the benefits in the meantime. [Laughter.] There is no contradiction in what I have said. I am referring to action taken during the current year. I said that every year we should raise money and every year we should pay it out. I understand that the party opposite have to do stamp-licking for more than a year in order to make up their minds—or are we to understand from the sniggers that they really mean to do nothing more until after the Elec-

tion? If that is so, the Bill is really an election dodge and is not introduced to satisfy the old-age pensioners or to deal with insurance, but to satisfy the political ambitions of the Tory Party—in which case the sooner we get rid of the humbug the better.

5.34 p.m.

Mr. J. K. Vaughan-Morgan: The House has listened with amusement and pleasure to the entertaining oration of the right hon. Member for Ebbw Vale (Mr. Bevan). What he delivered was, in fact, an expose of the old classical Socialist doctrine of the method in which social security should be financed. It is curious that although these views have been held through the centuries by the Socialists, the moment they get into power they abandon them.
The right hon. Gentleman talked about the term "National Insurance" being plain bunkum. He admits that he was a member of the Government which passed the national "Plain Bunkum" Bill, and they had their very good reasons. The right hon. Member for Llanelly (Mr. J. Griffiths) was himself not converted to the ideas of National Insurance until the time of the Beveridge Report, but it is very important to put on record the fact that what the Socialists preach in Opposition from below the Gangway they cease to practise the moment they obtain office.
I agree with the right hon. Member for Ebbw Vale that the word "insurance" is a mistake and a misnomer. It is ancient history; it has been there for 40 years, and it is not for us to criticise the reasons for which it was put in. It may not be a very good name, but can anybody think of a better?
Until today, in the speech of the right hon. Member for Battersea, North (Mr. Jay), we had not had one unequivocal pronouncement from any Front Bench speaker opposite as to what his party actually believed in. At any rate, there was nothing to match my right hon. Friend the Minister's forthright declaration in his peroration. When the right hon. Member for Battersea, North—speaking at that moment, I presume, officially, for his party—said that he believed in the contributory principle, I welcomed it very much as the first candid avowal from his side of the House. But we must recognise that the views of the


right hon. Member for Ebbw Vale are held by very many of the party opposite and even, I regret to say, by one or two of my hon. Friends.
I now want to deal with one or two points in the Bill, which, at moments, has been rather overlooked in our discussion. There has been singularly little mention of the beneficiaries, and I want to raise two very detailed points which are rather more relevant and important than some of the zooming into the actuarial stratosphere which has taken place—first, with the rates of sickness benefit for long-term hospital patients. After a certain time a reduction is made in their benefit, and it seems to me that if the rates are to go up some adjustment should be made in those reductions. My other point concerns a comparatively few people, but to them it is of vital importance—namely, what is called the "pocket money" allowance of those who reside in institutions or homes provided under Part III of the National Insurance Act. This, too, should now be raised.
I know that after Christmas we are to have a discussion upon the Phillips Report, and that, presumably, the increments in relation to people staying longer at work will be discussed, but I regret that the Bill makes no adjustment to their increments. It means that the increments earned are now reduced proportionately in relation to the pension which can now be earned. They should keep in step.
The right hon. Member for Ebbw Vale expressed his very interesting point of view and his very interesting economic theory, which seemed to me and to some of my hon. Friends to be a strong and forceful plea for an almost permanent Conservative Government, so that there would at least be some hope of a stable value for the £. I share that point of view. The right hon. Gentleman also said that the value of money has gone down over the years with the rising standard of living. I think that is what he said.

Mr. Bevan: I said that the fall in the value of money, so-called, cannot be said to have been inflationary in the proper sense of the term if it has been accompanied always by a rising standard of living.

Mr. Vaughan-Morgan: It boils down to what the economists call the secular decline of the value of the £. Sometimes it has been fairly gentle, sometimes—under the last régime—it was very rapid, but, in practice, there have been periods in time when the value of money has actually risen.
Therefore, I find it a little hard to follow the plea of the right hon. Gentleman for benefits to go up when the cost of living is rising and go up even more when the cost of living is falling; in other words, the right hon. Gentleman is asking for an even speedier inflation than we have had since the war.

Mr. Bevan: No. The benefits do not rise with the cost of living. The remain the same. They only rise nominally when the value of money rises in the case of people who can raise their own wages and dividends. If that is so, why should not the beneficiaries of social security at least have the same standard of living?

Mr. Vaughan-Morgan: I think we are on a slightly different point. My point is that it was for that very reason considered necessary by the right hon. Gentleman the Member for Llanelly to provide in his Bill for a quinquennial review, and which we have just carried out. At one stage the right hon. Member for Ebbw Vale seemed to be appealing for a stable value for money, while, at the same time, promising us bigger and better inflation.
The common ground between hon. and right hon. Gentlemen in the party opposite is their objection to the rise in the contributions. They are acutely and fundamentally divided on the philosophy behind the Scheme, but they are at least united on that point. Those who criticise the 1s. increase should, I think, not limit their opposition only to the Committee stage, but should, on Second Reading, since they object to the very structure of the Bill, at least produce a reasoned Amendment to the Bill showing why they object to the principle embodied in it.
One remarkable feature of this debate so far is that no hon. Member who has spoken about the contribution has referred to it, in the classic denigratory phrase, as a poll tax. I have no doubt that that phrase will be used later, but I want to say that it is not enough to call the worker's contribution a poll tax. It


is the incidence of a poll tax on the individual contributor which matters. The employer's contribution has also been described as a tax on the employment of labour, and, quite frankly, I think that in a period of full employment that is not in itself a bad thing.
On the question of a poll tax and the workers' contributions, I have said that it is the incidence that matters. It has been proved very clearly by my right hon. Friend that the incidence in regard to average earnings is lower than that which proved acceptable to hon. and right hon. Gentlemen opposite in 1946. But what we have to bear in mind is that that is only an average, and that there is a very wide range of earnings. It is only fair, and it is important, that we should watch the incidence of that contribution on the lower paid workers.
In her speech yesterday, the right hon. Lady the Member for Fulham, West (Dr. Summerskill) made what I thought was a very sensible and sympathetic reference to the position of widows who have to re-enter employment. I think these widows get a raw deal in our present system, and I feel that it is time that, in regard to these and other lower paid workers, we should consider adjusting the contributions as between employer and employed.
In the 1946 Act, there was a proviso about the 30s. limit, and some hon. Members probably know that for certain classes—I think apprentices are the main ones—where earnings are below a certain amount, or are in kind, the employer pays the whole or an increased part of the contribution for employer and employee. We should consider whether that principle could not be used or adapted for those in the lower income groups.
This suggestion has a respectable pedigree. I know that the Beveridge Report has been damned by the right hon. Gentleman opposite, but I think a very good point was made when it was suggested, in paragraph 408 of that Report, that we should give consideration to the
different distribution of joint contribution between employers and insured persons where the weekly rate is below a certain level.
I find that, during the Committee stage of the National Insurance Bill, the right hon. Member for Llanelly said this:
I have been giving consideration to the question whether the limit should be increased

beyond 30s., but this is an industrial matter with industrial repercussions, and I should like time to discuss it with representatives of industry."—[OFFICIAL REPORT, Standing Committee A, 10th April, 1946; c. 658.]
I have made what is known as a diligent search, but I find no further reference to those discussions, and I suggest that it is now time for the Government to look again and consider what can be done.

Mr. J. Griffiths: The provision is in the Act, which can be amended, for variants of the wages in the 1946 Act.

Mr. Vaughan-Morgan: I quite agree with the right hon. Gentleman, but, on the 30s. limit, the right hon. Gentleman said that he would give it further consideration, and nothing has happened, or, at least, no report was ever made about it.
I come back to the right hon. Member for Ebbw Vale and the old Socialist theory that all these burdens should be borne out of general taxation. Boiled down, all the chatter about investment—which is still going on, though one would hardly believe it—means what we are going to do to meet this burden, as we may well call it, in any current year. If we had not got some form of contribution, then it is suggested that the burden should be borne out of general taxation.
It remains a remarkable fact that we have had the Report of the Phillips Committee and the Beveridge Report, which was issued 12 years ago, and that no one came out for anything else but a contributory system except the Fabian Society, in 1942; and their evidence to the Beveridge Committee was very interesting then and remains very interesting reading now. It included this paragraph:
The policy to be followed depends largely upon the extent to which war time Income Tax on wage earners' income becomes an accepted part of the fiscal system. It must be clearly recognised that much of the cost would have to be borne by the workers themselves. If, in peacetime, the great mass of working class incomes can be included in the Income Tax, we should prefer this as a method of financing social security and the tripartite system of contributions by employers, employees and the State, which has hitherto prevailed.
That was a frank statement that the workers would have to pay for social benefits out of Income Tax, and I think that, when we live in an age in which that direct and indirect taxation is still too heavy on lower incomes, it shows clearly the path to which the policy put


forward by some hon. Members of the party opposite would actually lead.
It has also been submitted that there is an analogy between this, family allowances and the National Health Service, because both the latter are borne out of general taxation, and it is said, therefore, that all the national insurance benefits should equally be borne out of general taxation—I was going to say the general taxation fund, but the word "fund" is now out of fashion.
There is an argument as regards family allowances, and one which it is difficult to counter. But, as in so many things, most of the arguments were dealt with in the Beveridge Report. When such views are put forward, I sometimes suggest that it would be very sound if hon. Members were to turn back to the Report of that witch doctor, as I think the right hon. Gentleman called him, and saw the excellent reasons which were given for turning them down.
The decision whether to recommend that family allowances should or should not be taken in as part of the so-called National Insurance Scheme was a very difficult one to take. Lord Beveridge himself said that there were good arguments "for" and" against" but, the practical reason which he gave was that it would mean bringing the contribution up to too high a figure. Therefore, he recommended that the cost of family allowances should be borne by general taxation as opposed to the Insurance Scheme.
There is another important fact worth remembering, and that is that we are discussing family allowances and insurance benefits. The fact is that of all the social benefits, family allowances are the least appreciated. I think that that has a great deal to do with the fact that they are not paid for out of contributions. [HON. MEMBERS: "Rubbish."] Hon. Members opposite deny that, but why, when they were raising other benefits, did they not raise the family allowances? It was because there was no popular demand for doing so.
When hon. Gentlemen opposite had the chance to raise those insurance benefits which are linked with contributions, they did not, at the same time, raise the family allowances. I think that is the answer to those who submit that all

insurance benefits should be paid for by general taxation. The point of view has been well argued, but I feel that there is no justification at the moment for undermining the basic principles of the 1946 scheme.
The 1946 scheme was embarked upon in response to a popular demand. I agree that our ideas on these subjects must not be immutable. Perhaps a future generation will look back on our efforts in the same way as we look back, shall we say, on the Poor Law Act of 1834. Or perhaps not. They may think that despite the gloomy prognostications made, we built better than we realised. To denounce it now ill becomes those who, in 1946, supported the right hon. Gentleman, who was the architect of a very great scheme for which the country must always give him credit, although he has since sometimes not justified that credit. It is still worthy of the nation's support.

5.54 p.m.

Mr. Ronald Williams: In the observations of the hon. Member for Reigate (Mr. Vaughan-Morgan) I detected the complacency and smugness in his approach to this Bill which have been characteristic of so many contributions from the other side of the House. Personally, I can see nothing about which they have reason to be complacent. I know that right hon. and hon. Members opposite have wondered why we have not been engaging in congratulations from this side of the House and why we are in such a bad temper about the Bill.
There are two reasons for that. Very often the tone of a debate is set by the opening speech of the Minister. I have never heard a speech from a Minister more provocative or more likely to cause dissension in the presentation of what was nothing like as bad a case as he made it out to be. I have heard the Minister on many occasions, and have come to have a high regard for him. I will only say that his effort yesterday was shocking, that he should be ashamed of it, and that it fell far below his usual standard.
The second reason is that there has been an attempt on the part of the Government to give the Bill the appearance of being an interim Measure. The suggestion is that here they are coming along with a reasonably good, or even a good, Bill, and that it is their intention to deal


with this terribly urgent problem now, and to do it in such a way that the T.U.C. should do nothing but praise them, and that, if it does not, it is guilty of ingratitude.
In point of fact, it would be right for the Government to take up that attitude if they had not introduced this contributions point, because there they are not introducing an interim point. They are laying down the law permanently, and are saying in relation to the contributory principle that it is virtually immutable and that it applies to the non-actuarial as well as to the actuarial part of the scheme. In doing that, they are doing something quite wrong, and their whole approach on that point is entirely? unsympathetic and without the slightest justification.
Had the Government paid a little more attention to the very thoughtful observations made by the hon. Member for Wolverhampton South-West (Mr. Powell) a short time ago, they would then, I believe, have a better idea regarding the assessment of the contribution. If the Government were to take up that attitude, they would find that they had plenty of sympathy and friendliness from this side of the House. They should Say, "Here are deserving cases which have been waiting for a very long time. What is the very best we can do for them?" The Government should apply that principle, not only to the benefits side, but also to the contributions side.
What is the best that they can do on the contributions side? First, they can surely say that the amount which they want is an overall contribution of 13s. 8d. per week, of which 1s. 3d. a week is represented by the non-actuarial part. It is quite a simple matter for the Government to allow the present contributions made by employers and employees to remain at their present level and to restore the one-fifth part of the Exchequer supplement. If they did that, they would then have 12s. 6d. where they need only 12s. 5d.
It would be as simple as that if the Government wanted to help in this matter and wanted to give these very deserving cases the best that they can But the Government are not prepared to do that. They say that the emerging cost must be met by the contributor, and, in doing

that, they clap on a contribution which is excessive, unnecessary and unjust. Indeed, they do more than that. They erect the contributory principle in such a form and put it forward in such a way as to make it very difficult for any adjustment at all to be made in the future.
What will happen? When a subsequent Bill comes along, and we ask for second thoughts from the Government on the contributory principle, they will say, "Here is the emerging cost principle. It was dealt with in 1954. We were supported in that principle by the Phillips Report," and they will bring forward Other arguments which they have used in this debate.
That does not indicate a temporary attitude of mind towards contributions, an attitude of mind which says, "Here it is and we are sticking to it on this basis. We shall not alter it." That is a disgraceful and dangerous thing to do. If there are many people who are not wedded to the contributory principle at all, but are prepared to accept it up to the point at which the Government seem to have approved, where any increase in benefit must be matched by an increase of contributions—even thought the Exchequer is in a position to pay it without any difficulty at all—we might as well not have any further debates on this question of principle at all. We should simply ask the Government Actuary and he would tell us how much benefit there should be for how much weekly contribution.
That attitude of mind is all very well if we can say that we have all made up our minds about it, but we are a long way from that yet. If we make the contributory principle so sacrosanct that there is no possibility of modifying it in any way, the time will come when everyone will be saying that this is an oppressive and regressive poll tax. Indeed, many are saying that already. Although I quite understand the sensitivity of hon. and right hon. Members opposite in relation to the taxation side, if they do not wish tine whole scheme to be completely discredited they must be far more sensitive than they are on the contribution side
If, on reflection, the Minister was not thoroughly ashamed of himself when he sat down yesterday, he must have been very much in that frame of mind after


he heard the massive indictment of himself and the Government which was made by my hon. Friend the Member for Sowerby (Mr. Houghton). I have been in this House for only six years, but in that time I have never heard a more masterly survey, such a deployment of argument, as that put forward by my hon. Friend. From the benches opposite we have had no reply whatsoever to that indictment.
The Minister has told us of people who are covered by the Bill. He mentioned certain well-deserving cases, the noncontributory pensioners, the widows. He asked us not to waste breath discussing them, because that part of the case was under review by the Advisory Committee and that, in due course, a Bill would be brought in to deal with it. He mentioned one or two other points, but said not a word about a matter to which, as he well knows, the miners attach very great importance, the old workmen's compensation cases. In my constituency there is a great deal of heavy industry; not only mining, but engineering textiles, and many other industries. If anything should really command the Minister's sympathy, it is surely those compensation cases.
I am quite sure that he will have seen men suffering from pneumoconiosis and byssinosis; men in a terrible state of health. I know they would command his sympathy when he saw them, because I do not charge him with lack of sympathy. I ask him to consider those cases in relation to this Bill. Otherwise, I shall have to go back and tell those people, "You get nothing under the Bill, nor has the Minister given any indication that you will. So far as your rate is concerned, it remains where it was." There is a very strong case, and I put it to the Minister will all the force that I can, for bringing up, by supplementation, the rates of these workmen's compensation cases to correspond with the rates proposed in the Bill.
If the Minister has sympathy for these cases, has he any precedent for dealing with them? I say that he has. In 1951, when we were considering the Workmen's Compensation (Supplementation) Bill, we were faced with a very similar problem, where men and women who, for years and years had been suffering, were receiving weekly payments very

much less than the rates paid to others who had been injured at a subsequent date.
There were great administrative difficulties. In many cases the employers had gone out of business, and in others it was very difficult to discover when the accident had occurred. As the Minister well knows, all those problems were dealt with by supplementation, and a board was set up which has been doing first-class work. That is how that problem was dealt with then, and the Minister has the resources to deal with this one in the same way. He can find his resources from precisely the same source as before—the Industrial Injuries Fund.
Part of the productivity of which the Minister now talks is the result of the work of these now damaged and diseased people. Are they to have no benefit at all under this Bill? Are they to be sent empty away, when the Minister, on the basis of the precedents in his own office, could deal with them in this Bill? Thousands and thousands of deserving cases, after waiting for a very long time, could have an advance; not a great advance, but an advance which they very much deserve.
If the Minister says nothing about this, it will go through the coalfields that this Government will do nothing in this Bill for the workmen's compensation oases even when the Government have the resources at their disposal, and a first-class opportunity to do it. It is an absolute disgrace that they have not so far introduced it in the Bill, and that nothing has been said about these people. It is no use the Minister suggesting that it is the subject matter of another Bill. It is all part and parcel of the whole problem. If money from the Industrial Injuries Fund could be used before, it can be used now for this purpose, if the right hon. Gentleman has the will.
The National Union of Mineworkers' view is that, once the contribution and the benefit sides of the Bill have been dealt with, and consideration is being given to what else can be done in this Measure—not waiting for other Bills, but now—more importance attaches to the old workmen's compensation cases than to any other single factor. From a personal knowledge I can assure the Minister, quite frankly, that if he ignores this he does so at his peril. It will be


felt that although he has full notice and knowledge of the facts and the full opportunity and resources to deal with these cases, he has, none the less, neglected them.
If there is one thing about which the Government and their supporters seem to be patting themselves on the back it is the increased productivity, the great prosperity, which has come under this Government. They say, "At last we can do something." That something is to make the worker pay from his own pocket for these increases. In times of terrible slump they could do that. This is not evidence of prosperity. If the Chancellor of the Exchequer is so delighted about our prosperity what defence has he against our suggestion for the restoration of the one-fifth Exchequer contribution? He should be delighted to restore it. His attitude should be, "There is nothing sacrosanct about this contribution. We are so prosperous that we shall do better than our predecessors and make it one-third or a quarter."
There is nothing of that. The attitude is that the worker, in the course of producing more than ever before, must carry on his back the profit-maker, and the taxpayer, who, as my hon. Friend the Member for Sowerby pointed out, is the workman himself. He has to produce the goods necessary, the resources necessary, to pay his own contribution, the employer's contribution, and the amount being paid by the Exchequer.
I do not see that the Government have anything to pat themselves on the back for. But I will tell the Minister what I shall be obliged to say to my people when I see them in my constituency tomorrow and the day after. When crippled people and those drawing workmen's compensation come to see me I shall have to tell them, "You have got nothing." I shall have to tell all my people that, for all they have done in connection with increased productivity, not a penny is taken into account in calculating the benefits proposed in this Bill. It is all related to the arithmetical and actuarial calculations which the Government have in mind.
How dare the Government have the complacency to say to the electorate, "Production is what does this." Let

them remember that, for all their complacency, the greatest amount of production in this country, particularly in the heavy industrial areas, is to be found in places where the people can see through the Government's pretences. It is in those industrial areas where the Government's political philosophy will not be accepted at all and where, as often as not, their philosophy is received with execration. That is certainly so in the great constituency which I have the honour to represent. It should give pause to hon. Members opposite to remember that the great production figures that they talk about are really our production figures.
I have tried to show that, without doing anything more than restoring the Exchequer supplement of one-sixth, the Government will still have the necessary resources to pay the benefits which they propose. Was there ever a meaner trick than to bring in legislation which will result in a saving of at least £19 million in respect of National Insurance, and for none of that to be reflected in the calculations relating to increased benefits? That is a very saddening thing and I deeply regret it. I expect some shocking things from this Government, but that is going pretty low. I am delighted to see that I am amusing the hon. Member for Kidderminster (Mr. Nabarro).

Mr. Nabarro: All I would like the hon. Gentleman to admit to all of us—it is of great interest to both sides of the House—is that whereas the Exchequer supplement at present is one-third, the proposal of the last Socialist Chancellor of the Exchequer, the right hon. Member for Leeds, South (Mr. Gaitskell), was that the Exchequer supplement should be twice as bad as that—one-sixteenth instead of one-seventh.

Mr. Williams: I shall probably laugh when the hon. Member for Kidderminster is making his speech, and I shall not be the only one.

Mr. Nabarro: Answer.

Mr. Williams: In my own time. When the hon. Gentleman, with that great big voice of his, shouts across the Chamber "Answer," I can provide him with a little competition if necessary. I shall answer when the hon. Member for Kidderminster assumes a more friendly disposition, when he shows that he is a little more at ease. What I have to


say to the hon. Member for Kidderminster is this—but first, may I have his attention?

Mr. Nabarro: Yes.

Mr. Williams: I accept the hon. Gentleman's apology. I should like him to know that there are certain courtesies in debate. It is not in accordance with the customs of this House to grin, to interrupt and ask a question, then demand an answer, and then, before the answer is given, to turn in the other direction and read a document. I should like some attention from the hon. Gentleman.

Mr. Nabarro: The hon. Gentleman is getting it.

Mr. Williams: I am grateful to the hon. Gentleman, and I am grateful also for his apology. I thought it was magnificently given.
What I have to say to the hon. Gentleman is this. With respect to the 1951 position, about which arguments have been heard on both sides of the House, the situation in relation to this proportion was something with which I entirely disagreed.

Mr. Nabarro: Hear, hear.

Mr. Williams: But what the hon. Gentleman is doing is this. He is taking a point in history and saying, "What did you do in 1951?" because he wishes to divert attention from what the Government are doing in the changed conditions which now obtain.
The observations which the Minister made on that point yesterday were demolished by the Opposition Front Bench, a fact which is revealed in HANSARD, and I leave it at that. Still, if what the hon. Gentleman is interested in is what the proportion was in 1951, rather than what the Government ought to be doing today, that is a matter for him. We are concerned with the pensioners now and with what this Government can and should do. We are concerned because the Government are not doing sufficient.
I should like to say a few words about the industrial injuries contributions. It is proposed by the Government that there should be an increase of 1d. Why? On what basis? Certainly not on the basis

of the Actuary's Report. There are plenty of details in the Actuary's Report, but a more tenuous argument I have never read than the one which is related to the question of increasing industrial injuries benefits. The Government Actuary says:
In my report (Cmd. 8518) on the financial provisions of the 1952 Bill I pointed out that its effects would require further examination in the first quinquennial review under Section 59 (1) (a) of the Act of 1946. This review, my report on which will shortly be laid before Parliament, is concerned only with the period up to 31st March, 1954, and the effect of the present proposals is therefore beyond its scope. The results of the review indicate that although—on the basis of existing rates of benefit and contribution—the Fund would continue to increase for a number of years to come, contributions may sooner or later have to be slightly increased if it is ultimately to reach the stable condition necessary for continued solvency.
Surely, this is not the basis upon which the right hon. Gentleman is proposing an increase in contributions to the Industrial Injuries Fund. I submit that, without asking for any increase in contribution, he has sufficient to provide the increased benefits which he proposes, and he offers no argument in justification of this imposition.
I wish to say a word or two on the special hardship allowance. In the mining industry particularly, we attach great importance to the special hardship allowance, and I ask the Government to have second thoughts on the question of its increase. Certainly, this allowance should go up to 40s. Hon. Members will be aware how the special hardship allowance was introduced and how important it is. The Government have an opportunity hare to deal with a very important aspect of the Scheme, and one which falls well within their powers. This is a matter which need not be the subject of controversy at all.
If only the Government would realise that there is no reason why this non-actuarial emerging cost part of the financial provisions should be borne otherwise than by the Exchequer—they can say, "We will do this under the Bill and not after consideration of the long-term circumstances arising from the quinquennial review"—then this Bill would go through very quickly and in a friendly spirit. But they are wedded to their decision on contributions as a sacrosanct principle and I am afraid we have rough times ahead.

6.20 p.m.

Mr. Richard Fort: The hon. Member for Wigan (Mr. R. Williams) said several things with which we all could agree, particularly his hope that we shall not be too rigid in deciding between contributions and general taxation in making up the sums of what I shall continue to call the Insurance Fund. He did not produce many figures to substantiate his view that too much was coming from contributions and too little from taxation, but the many figures quoted in the debate by the Financial Secretary to the Treasury yesterday showed clearly how much the Government are adding to the Insurance Fund from taxation which will not only increase rapidly in the next few years but is far from negligible—£21 million—for the next full year. To talk in exaggerated terms as though the Government were doing nothing and the contributors were doing everything scarcely substantiates the case for flexibility which we may have to consider as the years pass.
Indeed, I have sometimes thought that much of the debate from hon. Members opposite has been dominated, understandably, by the fact that, while strongly holding the view that the duty of an Opposition is to oppose, they have been rather hard put to it to find a great deal in the Bill which they can oppose. The basic facts are clear; there has been a large rise in the Government contribution, there has been a satisfactory rise in benefits and a not too onerous rise in contributions. They have thus been placed in some difficulty in deciding what to do about the Bill. Perhaps they would have liked to put down a reasoned Amendment supporting the views which have been advanced strongly by the representatives of the National Union of Mineworkers and supported, although perhaps less emphatically, by the T.U.C., about the Government adding more to the Fund from taxation with less coming from contributions.
To put down a reasoned Amendment on a subject which touches the people as closely as this does, as those who sit on this side of the House well know, is not the best way to win political love and affection in the constituency; and, consequently, there has been a large amount of sham battling. There is a lot of politics in this subject. Many of my

hon. Friends and I, in our constituencies, had paraded against us last summer, either publicly or in gossip and rumours, that we had opposed an increase in the pensions because we had voted against what I must say was a cleverly drafted Motion from the other side of the House, whereas the Motion which we supported and which hon. Members opposite did not vote against, in which we welcomed an increase after we had received the Actuary's Report, did not receive as much publicity as did the first vote.
Similarly, there is no doubt that an unhappy confusion has been produced by the Phillips Committee's suggestion that the retirement age should be raised to 68, and I was delighted to hear the Minister, as well as hon. Members on both sides of the House, so strongly repudiate the idea that this was a matter which could be taken up lightheartedly. They agreed that it was, in fact, one which needed long discussion when we discussed the Phillips Report.
It seems to me that one point on which both sides of the House have been clearly disturbed, because it lies at the heart of our problem in these insurance matters, is what do we mean by subsistence? The right hon. Member for Ebbw Vale (Mr. Bevan) in that fine, wide-ranging speech which he certainly enjoyed making and, correspondingly, to which we enjoyed listening—at least, in parts—shirked the question entirely.
The hon. Member for Sowerby (Mr. Houghton) quite rightly made it the key point of his speech yesterday, and, with a good deal of passion, reminded us that many of the benefits we are discussing are the Poor Law standards of subsistence, writ large and slightly polished for the present time. He was quite right, because the standard of subsistence was based upon old surveys made before the war, particularly the Rowntree survey and surveys by the Ministry of Labour in 1937 and 1938, talking about the poorest of the poor.
Lord Beveridge, with his neat balancing of pennies and half-pennies, then began the polishing process, but the truth of the matter is that, useful as these figures are as a guide, there is something which all here, representing the country, must have in our minds when considering what is meant by subsistence and, therefore, by the benefits which are intended


to supply it; and it is what public opinion considers to be reasonable subsistence, making up its mind in each community.
We recall, from the days before the 1936 Unemployment Insurance Act, how different were the views of different communities about subsistence in the old Public Assistance days, but in each community there is a feeling of what it is decent for people to have and what it is not. This is very easy to forget: there is also, not only the feeling of the community of what is decent and what is not, but also the other feeling—perhaps not so powerfully expressed but none the less there—of how much people are prepared to pay in the community to achieve this standard. There comes a stage when people say, "We are prepared to go so far and no further."
It is our job not to bemuse ourselves on what look like objective figures, scientifically stated, when, in fact, they are no such thing at all, because the patterns of spending in millions of English families vary enormously. Our job is to try to interpret the public feeling. In this connection, I recently came across what seemed one of the wisest, as well as the most sonorous remarks, which I have ever read on the subject. It was written by Adam Smith in "Wealth of Nations." It was:
By necessaries I understand not only the commodities which are indispensably necessary to the support of life, but whatever the custom of the country renders it indecent for credible people, even of the lowest order, to be without.
That should be our touchstone.
My impression is that the benefits in the new Bill do go somewhere about the standard for which people are at present prepared to pay. Some of the passion which has been worked up about this subject has a rather larger element of the synthetic about it than is ordinary in debates here because we have forgotten what is fundamental in the whole of this field.

Mr. A. Evans: The hon. Member said that the proposals in the Bill just about meet people's expectations. He will know that the proposals are something more than the requirements of the official Interim Index of Retail Prices. Is he, therefore, arguing that that Index is not an accurate measure of the cost of subsistence?

Mr. Fort: I would not say that at all. The Index is accurate and a very useful guide, but we do not live by index prices, but by something a great deal warmer and more human. Our job here is to try to interpret public feeling, useful as some of the figures—particularly of the cost-of-living index standards—are.
There has been a tremendous amount of talk and a certain amount of theory about how the money should be made up for the contributions. I am quite convinced that the virtues of the contributory system are twofold. Week by week, quite conscientiously, people have to put money by for stamps. That makes them do what, perhaps, in our hearts we feel we ought to do but somehow have not the strength of character to do—put by money for the obvious changes of life. Judging from my constituency, which is an industrial one, returning a Conservative to this House, there is a real feeling that this weekly contribution makes us do what we ought to do. It gives a close connection with the right to benefit which no amount of general payment from taxation of the sort related by the right hon. Member for Ebbw Vale could ever get people to feel.
Whatever alterations we make in the future, I think we are very far from moving away from the present contributory system. When all the talk is done about how unfair all this is and what a difference it would make if only the Treasury proportion could be put up by a fraction, this is an uncommonly favourable insurance scheme. For an extra payment of £2 12s. a year one gets £19 10s. in benefit.
There has been a great deal of exaggeration about the problem of contributions. I thought the hon. Member for Sowerby was unfair about the speed of paying the increased benefits. He knows, better than most of us, how Government Departments work, but he pressed for an enormous speed-up in getting out the increased pensions. There is no resistance to getting out the pensions. So far as we can see now, there is no nice timing about that, as there was in 1951, to get it to coincide with the General Election. Looking back at the result of that Election, that does not seem a very wise political calculation.
When the hon. Member suggested that we could speed up the later administrative procedure to an enormous extent the


hon. Member must have known that he was making a very unfair attack on the Government. I think that commonly it is forgotten what a tremendous job this is. Some figures have been given about it this afternoon by the Parliamentary Secretary. Here are some more: of 4½ million books, 4 million could be easily done, but half a million are affected by 80 different rates of payment.
To suggest that this can be handled easily through the Post Office, or easily corrected, is carrying the argument to unfair lengths. The sensible thing to do is to put the heat on and get the work done in the shortest time possible with modern machinery and modern administrative methods. To suggest that it could be done in a few weeks is very unfair.

Mr. Douglas Houghton: It certainly was not my intention or desire to be unfair to the Government on this matter. I am fully conscious of the administrative difficulties. I agree that if the Minister is to be limited by conventional methods in dealing with this matter probably his time-table could not be shortened very much. But I do plead that in connection with an emergency Measure of this kind quite unconventional methods should be used, even though the degree of financial security so dear to the hearts of the Civil Service is not quite so great as usual.

Mr. Fort: I have said all I wanted to say on that point, and the hon. Member has made his answer to it.
I am sorry that we have had to come to this Bill without that general discussion which we all hoped would be possible, but it is right that we should do so. We all know that in our constituencies the winter is feared, particularly by old people. It has started badly enough with this continuous wet and cold weather. We are right to push ahead, but we have some great problems to discuss when the Phillips Report is debated and when we get the Report of the National Insurance Advisory Committee. I was glad to hear the Minister say yesterday that both those sources of information will be debated together. Although we shall have the main framework of the Scheme fixed—and I think not unwisely fixed—by the present Bill, we shall be able to find in those Reports a great many things which ought to be done.
Probably one which worries most of us is the question of the 10s. widows' pension and also some of the variations in contributory conditions. In that respect, I was particularly pleased to hear what my hon. Friend the Member for Reigate (Mr. Vaughan-Morgan) said when he discussed the whole problem of contributions records with so much knowledge and feeling. We still have a great deal of work before us, but, in the meantime, we are passing a Bill which, for all the sound and fury which has been developed during the debate, will be a very proper and reasonable contribution towards giving us an even better insurance system than we now have.

6.40 p.m.

Mr. Harry Wallace: I hope that the hon. Member for Clitheroe (Mr. Fort) will excuse me if I do not follow his argument at once, although I shall later cover most of the points that he raised. At the same time, I shall do my best to be brief, as I know that many hon. Members wish to address the House on this subject.
I agree with the hon. Member for Clitheroe that the subject is very important. It must receive much more careful consideration. I express my disappointment, because when the Minister made his statement a few days ago I really thought he was indicating that he would introduce something new, something more comprehensive, and something that would strike the imagination. Quite frankly, I regard the Bill, generally speaking, as doing nothing more than adjusting the money rates of benefit to the 1946 basis, and I cannot be very enthusiastic about it. I agree that the Bill is important, and I am not opposed to the increases in benefit which are recommended, but that does not mean that I am satisfied with the Bill.
When the Joint Parliamentary Secretary addressed the House he referred to the Post Office, and I interjected. I was not trying to be uncivil or merely to interrupt, but when he referred to Post Office trade unions it was only fair that he should state to which unions he was referring. When he attached such importance to the questions which he had discussed, he might have told the House what those questions were. I am certain that in a matter of this kind, in which we seek to help the old people, the


unions would be only too eager to do all that was humanly possible to help the Minister.
Like the Parliamentary Secretary, I do not want to tread the ground where experts are dealing with millions and halfpennies. I want rather to give the House my impression of what the man in the street thinks about the subject. I was glad to hear the Minister say that he is not attracted by the suggestion that the age of retirement should be increased. I know from my trade unions, from my trades council and from my supporters, that there is no support whatever for any suggestion that the age of retirement should be increased beyond the age of 65. Any political party wanting to embark upon that adventure could say goodbye to office for a long time. I am sure that hon. Members opposite are well seized of this.
One hon. Member on the Government side referred to the inducement for a man to prolong his employment after the age of 65. I have spoken to many of these men, and they take this view: "All right. Instead of going at 65, I work until I am 70. The country is not paying me a pension while I am working. Therefore, it is saving a good deal of money." A man in that position does not consider that the increment which he gets is adequate compensation. I agree with the hon. Member who raised the question; a man will think that his position is made relatively worse. I am not so sure that this Bill is likely to induce people to remain at work until the age of 70. I hope that the Minister will look again at the question of increments.
I was surprised that an hon. Member opposite should say that people were not aware of the family allowances. If that is how he feels, he should suggest that the family allowances should be cancelled. He would then quickly learn that people are quite conscious of the importance of family allowances. I am not suggesting that it was the hon. Member for Clitheroe who raised the subject. It was done by an hon. Member below the Gangway opposite, whose constituency I do not remember.

Mr. Nabarro: It was nothing to do with me.

Mr. Wallace: I did not accuse the hon. Member for Kidderminster (Mr. Nabarro) of making a declaration like that. He is too canny.

Mr. Fort: What my hon. Friend the Member for Reigate (Mr. Vaughan-Morgan) said was not that family allowances were not known, but that they were the least popular of the social services.

Mr. Wallace: The hon. Member was absolutely wrong. If he thinks that family allowances are not popular, let him suggest that they should be taken away.
This is how I regard the question of delay. In a Question on 8th March, my right hon. Friend the Member for Battersea, North (Mr. Jay) asked the Minister of Pensions and National Insurance whether, in view of the rise in prices, he proposed to increase the retirement pensions. The Minister's answer was, "No. Sir." On 19th March, two of my hon. Friends sponsored a Motion on the subject of pensions and fixed incomes. The then Parliamentary Secretary expressed his acceptance on behalf of the Government, and the Motion was accepted by the House. The Motion stated that it was desirable to raise the benefits to secure an adequate minimum of existence.
On 19th March, the Government accepted in principle that something should be done. It is only now that the Bill is introduced, and it will be April before the benefits are secured. We think that there has been unnecessary delay. Having accepted the principle on 19th March, the Government should have got ready to implement it.

Mr. J. N. Browne: My hon. Friend the Minister did say, "in the lifetime of the present Parliament."

Mr. Wallace: That has nothing to do with it. Had I accepted a Resolution of that nature, endorsed by the House, on 19th March, I would have started getting ready to implement it. There is very little excuse for the Government.
Like my hon. Friend the Member for Sowerby (Mr. Houghton), I am not happy about the importance which the


House seems to attach to the 1946 basis. I would not like to be misunderstood, but the 1946 basis seems to be regarded as sacred and something that must be maintained for all time, except for adjustment according to the rise in the cost of living as revealed by the cost-of-living index. It may be that somebody will want to reduce the benefits if the cost-of-living figure goes down. I should like the Minister to say why, if so, the 1946 basis must be regarded as sacred.
The pensioner who has done his job is entitled to a share of the increased national income—the real income—as distinct from an adjustment of benefits because prices have changed. That is how the worker regards this matter, and I should hope that the House will agree that, as the nation's cake is made larger, the man who retires should get a larger share of it. There are many members of the community who receive pensions for service. I have never understood the distinction that some hon. Members seem to draw between a man who works in a mine or a factory and a man who works, say, in the Civil Service or in local government. We are all giving service, and I should like to see everyone who gives service to the community getting his pension, and in an honourable way, as of right. That is how I feel on that question.
The hon. Member for Clitheroe asked, what is subsistence? I shall try to answer that question, and in doing so shall consider statements made to me by pensioners. I say at once that the increase from 54s. to 65s. for a married couple is substantial, and it will be very much appreciated by those who may get it. I have in mind the circumstances of a couple who will receive 65s. The man does not drink; he does not smoke. He has worked all his life, and saved a few hundred pounds. His wife is absolutely opposed to going to the National Assistance Board for help. She would be opposed to going to any such body for help, and nothing will change her. Her husband agrees with her.
We can all have sympathy with that point of view, though I think they are mistaken. The officers of the National Assistance Board in my area of Walthamstow are kindly and helpful people, and I take this opportunity of saying to my friends that they are mistaken in not

going to the Board, and I hope that all old people who need extra help will go to the Board.
The rent and rates of this couple amount to 19s. For light and fuel they pay 10s. That is a very low amount. I put their expenditure on food at 40s. That figure is not drawn out of my head. I am taking figures that come before me in connection with the management of hospitals, the maintenance of hostels, and the maintenance of single individuals and of married couples in homes. I say that 40s. for a married couple is most reasonable. If we apply the 40 per cent., a figure we get from the Ministry of Labour index, to the 65s., we get 26s. for two adults. I do not believe that there is a Member of the House who will attempt to justify an expenditure of only 13s. per head per week on food. If there is, I should like to hear him.
What do these circumstances mean in this home? The old couple have bacon once a week. They have no meat. That has gone. Their butter has gone. I suppose that their tea will have to go, too, shortly. I think it is a pity that those making high dividends out of the sale of tea do not pay some special contribution to the old people. Their savings have gone.

Mr. Nabarro: What about the price of coal?

Mr. Wallace: Some people seem to find the increase in the price of coal and the increase in the dividend on tea comparable. I do not.
The answer to the problem of these old people is that they need 84s. at least. Will anyone say that that is too high for minimum subsistence? That, I think, is about half the average wage of the country. I look at it in this way. The proposals in the Bill are an improvement, but the increase provided is not enough for a pension which will give an adequate minimum standard of life as endorsed by this House on 19th March.
What is to be done? I come to the conclusion that the rates of assistance will have to be very substantially increased. Certainly the man in the street says, "I am going to get an increase of pension on the one hand, but I shall lose it through the National Assistance Board on the other hand." There is truth in that, but it is not all the truth, as I have


already indicated; but the Minister will have to give more attention either to this rate of benefit or to the rates of assistance.
I want to make a special appeal to the Minister on behalf of the 10s. widows. I appreciate that he said that after Christmas we shall be reviewing the position generally, and that he has in mind the plight of the widows, but I hope that something will be done for these widows who are getting only 10s. They are known as widows, and everybody thinks they are getting the widows' standard pension. They are not. Some of them work, but as someone said to me only yesterday, it is only odd jobs they get, and, generally speaking, they do not get high wages. I should say that very often they are exploited because they are widows and must gat work. As I understand it, this 10s. payment does not come within the scope of the National Insurance Act, and the amount was fixed many years ago, about 1925.
Am I asking too much or suggesting something unreasonable when I say that the 10s. should be lifted at least to 15s. pending the review of the whole question of the treatment of widows? That would be a great help to these women. They feel deeply a sense of being treated unjustly. If anything can be done, I hope the Minister will do it. I hope he will give second thoughts to this matter to see if something can be done now. Amendments can be moved to the Bill, and possibly an Amendment can be moved to help those women now.
I promised to be brief, and so I shall not attempt now to pursue other matters. I want just to express my regret that this Bill is not as comprehensive as the Minister led me to believe it would be. I still hope that after the consideration of the whole of this problem we shall have a Measure or Measures which will greatly improve this welfare scheme. I am disappointed at the delay. I did think that after the House passed that Resolution of 19th March the Government would have been preparing to pay these benefits before Christmas, and I still hope the Minister clan find ways and means to speed up the payments so that they can begin before 1st April. I hope that one of the matters the House will consider is the establishment of a system that can respond to the needs of the old

people more readily than the present systems seems able to do. I repeat what was said yesterday, that this winter, from now to April, is a big part of an old man's or an old woman's life.

7.0 p.m.

Mr. Robert Carr: We all know the knowledge and understanding with which the hon. Member for Walthamstow, East (Mr. Wallace) speaks on this subject. I was interested to hear what he had to say in trying to work out what he thought was a minimum subsistence level in present conditions. He said that he welcomed the increase in pensions and benefits which we had made but, according to the calculations which he gave to the House, they still fell considerably short of a reasonable, minimum level of subsistence. Probably we would all agree that there is considerable truth in that, but I think we would all recognise—and the hon. Member implied it—that the proposed level of benefits is nearer to a genuine subsistence level than it has ever been before.
I was interested in the figures of subsistence level which the hon. Member gave. He arrived at a figure of 84s. for a married couple. If my recollection is correct, within that 84s. he included a rent element of 19s. If one subtracts 19s. from 84s. one is left with 65s., which is the new rate of benefit for married couples under the Bill. When the Beveridge scheme was first put forward, it was the intention that the basic insurance benefit, received as of right in return for contributions, should provide a subsistence level on its own, but it was also recognised that to cover rent would always be extremely difficult, indeed impossible of achievement, because of the great variations in rents and rates from one part of the country to another and even from one street to another in the same town.
When we first thought of putting the scheme into operation, the most that we thought we would be able to include in the basic benefit would be a few shillings towards rent and where a married couple had no other resources they would have to go to the National Assistance Board for part if not for all their rent. Therefore, I submit that in arriving at 65s., which is the same figure as the hon. Member for Walthamstow, East gave as


the basic figure of subsistence minus the rent, we are achieving something which we have never achieved before. That, of course, need not stop us, and I hope does not stop us, from wanting to make further progress in future.

Mr. Wallace: I agree that those two old people whom I mentioned refused to go to the National Assistance Board, and I have some sympathy with their point of view. The trouble is that, though the pension is going up by 11s., the rent is also going up by 5s.

Mr. Carr: I realise the reluctance of people to go to the Assistance Board but I believe that that is being gradually broken down. It is broken down partly, I hope, by what we as hon. Members do with what influence we have, but still more I believe that it is being broken down by the attitude of service, help and consideration which, in my experience, comes from the officers of the local offices of the Assistance Board throughout the country.
The debate on this Bill and all the discussions in the House and outside that led up to it have been concentrated mainly on retirement and old-age pensions. Nobody welcomes the increase in that benefit more than I do, because I believe that all of us who work in our constituencies have the experience that it is the elderly people who have been for a long time in need of further help. The only comment I would make on that is that it is not a new need.
I can only tell the House of my experience of the number of cases that have come to me and say that to my knowledge in the last year or two the number has been less than previously. I only say that it is not a new need, and I can only deplore the "pensioneering" that has gone on in the last few months in making out that the need of old people at the moment is so much greater than it has been for a long time past.
While it is important and right that we should improve the pensions of old people—as we are now going to do—let us not think for one moment that the provision of adequate pensions is more than just one part of dealing with the problem of the care of the elderly. There is far more to that great social and economic problem than the provision of pensions.
If we welcome the Bill, in the first place, for the help which it gives to pensioners, we should also welcome it equally for the help it gives to recipients of other types of benefits. I believe that in talking about the needs of pensioners—from which I do not dissent—we have been guilty of talking too little about the needs of the sick and the few—thank goodness—who are now unemployed. In my opinion, their need for benefits was just as great and I am at least as glad that we have been able to increase those benefits as I am that we have been able to increase the pension rates.
Like my hon. Friend the Member for Reigate (Mr. Vaughan-Morgan), I hope that on further detailed examination we shall look very carefully at those benefits which do not come so much into the public eye, such as the so-called pocket money to people in institutions and the amount paid to long-term stay cases in hospital. We should not be satisfied by saying we have done a good job with the benefits which most people know about without looking at the less well-known benefits and seeing that we do all we can for those.
One thing which we on this side of the House are justified in saying about the Bill is that the country should recognise that the advance now being made has been rendered possible by the increased economic prosperity and stability of the country. The hon. Member for Wigan (Mr. R. Williams) said that extra productivity and economic prosperity have nothing to do with it. I do not want to enter into detailed argument of that kind, but if it had nothing to do with it why did the party opposite do nothing to stop the falling value of pensions and other benefits when they were in office? I would not suggest for a moment that it was because they did not care, or did not want to make improvements if they could do so. The only reason they did not do so was that the economic condition of the country would not allow it.

Mr. Jay: The hon. Member knows that we raised pensions by 4s. in 1951.

Mr. Carr: The party opposite raised some pensions by 4s., but I am sure that the right hon. Member would not and could not deny that those pensioners for whom benefits were raised were still


far from getting pensions of the same purchasing power as the 26s. which they received when the pension was first introduced.
The only reason more was not done, or done sooner, was that economic conditions did not allow it. As long as the country was faced with the threat of recurring crises it was impossible to build securely for the future in this or in any other economic or social field. Our hopes of maintaining the value of our improvements, let alone of making further improvements in the future, must depend upon our ability to maintain economic stability in the years ahead.
The hon. Member for Walthamstow, East was not satisfied with all that the Bill does. Who is ever satisfied? I hope that we shall never be satisfied with any measure of social improvement, because there must always be many further advances to be made. The stage which we have reached was not achieved in 10 years or even in one generation. It has been built steadily, brick upon brick, for 100 years or more and, therefore, there will always be much more to do.
Apart from pointing the further direction in which we would all like to see more progress made, we must all welcome the results of the Bill and on the whole must be pleased and surprised with the size of the increases which are being made. Every benefit covered by the Bill will be at a record level, and by that I mean higher in purchasing power and not merely in monetary value.
The only difference of opinion between us is about the method by which we are achieving this result. It appears, on the face of it, merely to be a difference of opinion concerning the amount of the increase in contribution. This difference has developed along the normal lines of division between the two sides of the House. That is not surprising. Nobody likes paying more money for anything if he can help it. The Opposition would be less than human if they did not try to gain some popularity out of that very natural dislike.
However, it is obvious, particularly since the speech of the right hon. Member for Ebbw Vale (Mr. Bevan) and the way in which the right hon. Member for Battersea, North (Mr. Jay) was interrupted from his own side, that the

difference of opinion goes far deeper than one between the two sides of the House merely on the size of the extra contribution. It is not so much an argument between the Government and the Opposition as an argument, as in so many cases lately, within the Opposition itself. The hon. Member for Cardiff, West (Mr. G. Thomas) smiles, but if he was present during the events which I have just described he will find it difficult to deny what I have said.
The real argument is between hon. Members opposite who want to maintain the insurance principle and those who want to get rid of it. The right hon. Member for Ebbw Vale spent a great deal of time saying why the insurance principle was bunkum. He wasted a lot of effort. No one on either side of the House who has given any real attention to the social services has ever taken the insurance principle in the completely literal and technical sense of the term. It is a term which we have all come to understand and which it has been convenient to continue using.
Perhaps it would be more accurate to say that we believe in a contributory system aided by State funds. Whether we mean "insurance principle" in the technical sense of the term or not, I believe that the maintenance and the strengthening of the contributory principle is worth paying for. Moreover, I believe the majority of people in the country think it worth paying for. I do not believe people are dismayed by the extra contributions which are demanded. The benefits are higher than they were expected to be and the extra contributions are less severe than was feared by most people, and the majority believe that they are getting, and will get still more in the future, a fair return for their contributions.
People desire to maintain a sense of independence in these matters, and whether they have a real contractual agreement such as is implicit in a true insurance principle or not, is beside the point. Psychologically, they have the satisfaction of paying contributions during their working lives and knowing that, as a result, when they are sick or retire, they will get benefits as of right. People value that sense of independence and wish to maintain it. Hon. Gentlemen opposite and other bodies, such as the T.U.C., who


adhere to the contributory principle are far nearer the real sympathies and feelings of the average man in the street than the right hon., Member for Ebbw Vale and others like him who want eventually to destroy the contributory principle.
We ought not to be unmindful of the dangers of weakening or abolishing the contributory principle. There is danger in having the benefits paid out of the general fund of taxation. If times of economic crisis arose, a Chancellor might feel that an arbitrary change could be made in the level of benefits and in the conditions of their receipt. That is a far greater danger if the benefits are paid purely from taxation than if they are paid out of a Fund based on a strong contributory principle.
Experience in one or two other countries bears that out. I believe, for example, in Sweden, where the benefits are paid entirely out of taxation, it has been found impossible in practice—or, at any rate, it has not happened in practice—to have any pension without a means test; every pension under those conditions is subject to some form of means test. It is far better to have a contributory principle and benefits as of right than to pay all the benefits out of the pool of the general fund of taxation with the risk of their being controlled year by year in the Budget by the Chancellor of the time.
Consequently, the only real question for us to ask ourselves is whether the contributions which are demanded are reasonable ones. I do not propose to go into a lot of figures; I shall make only one or two comments. It cannot be denied that, on average, the increased contribution will be a smaller percentage of earnings than the original contributions under the 1946 Act.

Mr. S. Silverman: How does the hon. Member reconcile the House of Commons arbitrarily increasing the contribution by 1s. with the earlier part of his speech in which he said that he preferred the contractual principle, which I take to be the principle whereby two people arrive freely at a bargain and both keep it?

Mr. Carr: The hon. Member is very learned in legal arguments on these points, but whatever he may argue, the man in the street understands that if he

pays contributions during his working life he will get increased benefits even though Parliament can alter the rules and conditions from time to time.

Mr. Silverman: What is the contract?

Mr. Carr: If it is a matter of taxation there can be alterations annually in the Budget, whereas an alteration of the insurance scheme involves a great process, such as is going on now, when it is considered on its own and not merely as part of the economic and financial affairs of the nation.

Mr. Silverman: Does not the hon. Gentleman realise that the truth is the other way round? If the benefits are raised by taxation, they can be changed only once a year; if the change is made by Act of Parliament, they can be altered every week.

Mr. Carr: The electors would have been very pleased if the Labour Government had made changes every week during their six years in office.
While on average the increased contributions will be a smaller percentage of earnings than the original contributions in 1946, I agree with my hon. Friend the Member for Reigate that we ought to look very carefully at the contributions of the lower-paid workers to ascertain whether there ought not to be an alteration in the balance between employer and employed.
With regard to the Exchequer contribution, the charge has been made that the emergent cost of the new benefits is to be met mainly out of the contributions of individuals and that the Exchequer will not pay its fair share. The figures given by the Financial Secretary last night killed that charge once and for all, because, in 1955–56, 21 per cent. of the increase will be paid by the Exchequer, by 1959–60 the proportion will be 31 per cent., and by 1979–80 it will be 47 per cent. It cannot be said, therefore that nearly all the emergent cost will be met by the contributor.
I believe that the increase in contributions is reasonable and that it is a price worth paying by the individual to maintain the independence and strength deriving from the contributory system. The Bill should be judged not only against the needs and pressures of the moment, but against the historical background of


the social services, and the way in which they have developed.
They all started within the single body of Poor Relief, under which the individual citizen received a sum of money subject to a test of destitution. Gradually, over the years—and I am talking of a period of more than 100 years—from this single body of Poor Relief, subject to a destitution test, we have seen separating out gradually, a number of different social services, each subject to its different test of means but tests less severe than the original destitution test of the old Poor Relief. First, we saw growing up, on this principle, individual social services for things such as hospital and medical treatment. Then we reached a new phase of this separating-out process with the introduction of the insurance principle, which substitutes a contractual right to benefit in place of the individual test of means.
By the insurance principle we put people into categories who are likely to need help and those categories receive help without any individual test of means. The insurance principle grew over the years until it reached its greatest development. This was the implementation after the war of the Beveridge Report. In that Report we intended that insurance benefits should be big enough to provide subsistence for people who had no other means at all, but that grand concept was never fully fulfilled because of inflation. For some years we went backwards instead of forwards. The value of insurance benefits fell, National Assistance scales went up to figures above the benefits, while the number of people on assistance grew correspondingly. That was a backward and deplorable trend.
Now this trend has been stopped. We heard from the Minister yesterday that there is at last a tendency towards a decrease in the number of people who seek National Assistance. The increased benefits under the Bill will push that improvement still further. Once again, we shall at last be able to say that the benefits received as of right under our National Insurance Scheme are ahead of the basic National Assistance scales. Once again, we shall be able to take up the advance in our social services which proceeded over generations. We tried to take a great step forward in 1946, but

that was never fully implemented because of the economic conditions of the period.
We are now able to renew the advance. We can all see many things still to do; but, regardless of party, those who care about our social services must, and will, welcome this Bill.

7.23 p.m.

Mr. George Thomas: The hon. Member for Mitcham (Mr. Carr) spoke for all of us when he said that we welcome any extra relief for the old folk. There is no disagreement on that point on either side of the House. Nevertheless, I ask myself why the Bill is necessary at all. Why are the Government bringing it forward after three years of office?
First of all, they are bringing it forward because of the considerable increase in the cost of living. The hon. Member for Mitcham said that benefits would be at a record level; but the cost of living is at a record level in time of peace. The cost of food has never been higher than it is today. [An HON. MEMBER: "What about wartime?"] I do not know about wartime, but I am willing to accept that point, as it strengthens my argument. We ought not to deceive ourselves as to why the Measure is introduced. It is an emergency Measure to relieve the old folk as far as possible from hardship caused by the higher cost of living brought about by the removal of food subsidies and other incidentals of Government policy.
In 1945, when we embarked upon vast new social changes, there were sneers from the other party that we were starting a Welfare State. That was not said by way of tribute at the beginning, although it became an honourable expression later on. It was first used by way of abuse of the Labour Party because we were introducing into the social life of these islands the principle that the strong should help the weak and the rich should help the poor, and were making sure that the very wealthy paid much more than the lower-paid wage earners towards the social insurance scheme.
The people who are in greatest need of assistance will not have the benefits from the Bill that they ought to have. No hon. Member in his senses would say that 2s. 6d. a week is sufficient to meet the increase which has taken place in the


cost of living in the last three years. That is the benefit being given to those who are the bottom of the social scale.

Mr. J. Enoch Powell: It so happens that the National Assistance Board, an impartial body established by the party opposite, has recommended precisely that sum.

Mr. Thomas: The hon. Gentleman is not as good as he usually is. He has given us information which is many days old and which, I presume, is already in the possession of everyone in the House. I am arguing that nobody would suggest that 2s. 6d. a week is sufficient for people who are driven by poverty to the National Assistance Board. While there is no disgrace in going there, it is poverty that leads people there. They are to get only 2s. 6d. a week, while people who are more comfortably off will draw the full pension. They will have 7s. 6d. per week and will not need to go to the National Assistance Board.

Mr. Powell: Do we take it that the hon. Member is criticising the National Assistance Board and saying that the scale which it has proposed to the Minister is wrong?

Mr. Thomas: Of course I am. The hon. Member is slower than usual. Of course I am criticising the Board. I am also criticising the Minister, who is not obliged to accept its recommendation. He could have introduced higher figures if he had so desired. It is the Minister's responsibility and not that of the group of annonymous people outside this House called the "National Assistance Board." The Minister accepts responsibility for the regulations which will be introduced according to the terms of the Bill.
I have a great deal of sympathy with those who say that it is time we looked again at the way we finance this Scheme. There is nothing sacrosanct about the contributory system. It is not the law of the Medes and Persians. It need not bind us in this House, where we ought to be open, above all, to change. There is something amoral about a millionaire making the same contribution to the National Insurance Scheme as a chap with £5 a week. It is socially indefensible.

Mr. Drayson: But it is the contributory principle.

Mr. S. Silverman: My hon. Friend is explaining why it should be done by taxation.

Mr. Nabarro: Order.

Mr. Silverman: Order yourself.

Mr. Thomas: After that pleasant interlude, I will continue my argument, which is that very wealthy people ought to be making a bigger contribution than the very poor. As it is, the 10s. widow has to pay her contribution to the National Insurance Scheme as though she were in receipt of a decent wage. Can anyone defend that? There is no reason why it should not be put right in the Bill. There is no reason to wait until after Christmas to do so. We understand the problem and we appreciate the social need, but we are telling these people that they must go to the back of the queue, or stay at the back of the queue where they have been for a long time.
Family allowances and the National Health Service, financed as they are from taxation, point the way which we must at least examine carefully and not turn down brusquely by saying that the Scheme must be based upon direct contributions. We contribute to the Health Service according to our ability. "From each according to his ability; to each according to his need," is the moral basis of our Health Service, and why that principle could not apply to National Insurance I cannot for the life of me understand. Why should a man have to claim his pension on a means test basis if he pays through taxation for what we call insurance, when he can receive the Health Service benefits without having to undergo any means test?

Mr. Carr: I am sure that the hon. Member will realise that the Health Service proves the point which I was making, and is contrary to that which he is making. It was the hon. Member's Government which found it necessary to introduce charges and the means test into the operation of the Health Service.

Mr. Thomas: I know of no means test that was introduced in connection with the Health Service.

Mr. Carr: Charges were introduced.

Mr. Thomas: Charges do not constitute a means test.

Mr. Carr: Charges could be avoided if there were a means test.

Mr. Thomas: The hon. Member is becoming confused. He said that the Labour Government introduced a means test. That is quite inaccurate. [HON. MEMBERS: "No."] It is apparent that we see these things differently, according to the side of the House upon which we sit.
The family allowances scheme is paid for out of taxation. The millionaire pays very heavily, but the young, lower-paid wage earner contributes nothing, although he may be drawing the benefit at the bottom of the scale. It is right that those who can afford to pay shall pay, and what hon. Members opposite are doing in opposing the suggestion that insurance shall be paid for out of taxation is defending the rich man.

Mr. Nabarro: Oh.

Mr. Thomas: Of course they are. All those strange noises which the hon. Member makes are not arguments. He will know very well that a heavy rate of taxation hits the wealthy much harder than anybody else. I hope that my hon. Friends will examine this idea very carefully.
If the idea is rejected, why should not the contributions be on a percentage basis? I cannot agree that the fellow in the low-wage-earning scale should make the same contribution as the millionaire. It would be quite easily collected, as P.A.Y.E. is easily collected, if we paid 1 per cent., 2 per cent., or whatever was required, from our income towards the Insurance Scheme. It would be much more equitable than this flat rate, which hits the very people whom we ought to be protecting.
I am sorry that the hon. Member for Barry (Mr. Gower) is not here.

Mr. Nabarro: He is.

Mr. Thomas: Oh, yes. At any rate, he is not actually within the Chamber. I have already indicated to him that I am going to refer to his speech. Like the Parliamentary Secretary, he seems to dislike party politics. Almost whenever he speaks, either here or in that part of the world from which we both come, he expresses a desire to be non-political.

It is a strange thing for a man who comes here on a party ticket, and makes much boast of it. We all know where our loyalties and ideals lie, and it is much better for us to say quite openly where we stand on this question.
Last night, the Financial Secretary to the Treasury gave us some figures which I read with interest this morning in HANSARD. Included in them was the cost of this Scheme for the next 20 years. There is no one who can tell the House what will be the cost of this scheme in 20 years' time. We are moving into the atomic era. We are told that by 1960 atomic power will be introduced on the industrial front of Great Britain. The productive capacity of these islands may be increased a thousandfold. None of us knows the possibilities of our tomorrows, and it is wrong to deny justice today because of a possible crisis in 25 years' time.
Although I welcome the 7s. 6d. rise in the basic scale, I am sorry that the people in the greatest need will remain in the greatest need, and also that throughout this winter nothing is to be given to the old folk. I cannot understand why there is this hurry to get the Bill through before Christmas. It is not going to make any difference. My right hon. Friend the Member for Fulham, West (Dr. Summerskill) suggested that the Bill was being printed. Not so long ago the President of the Board of Trade brought into force the provisions of a Bill before the House sanctioned it. If he could do that for the big cotton barons—

Mr. Deputy-Speaker (Sir Rhys Hopkin Morris): Order. The debate seems to be getting a little beyond the scope of the Second Reading.

Mr. Thomas: I move to my conclusion by saying that it is foolish to dismiss out of hand these increases in the basic scale. I welcome them, but I wish they were being introduced more quickly. I also deplore the fact that we can dismiss so easily those people who are dependent upon National Assistance, those who are in receipt of non-contributory pensions, and those widows of under 50 years of age who are in receipt of a pension of 10s. a week. They ought to be on our consciences at this time.

7.39 p.m.

Mr. G. B. Drayson: I am very glad to have the opportunity of saying a few words upon this important and major Bill, which increases practically all the National Insurance benefits, and especially the basic rate of pension from 32s. 6d. to 40s. for a single person and from 54s. to 65s. for a married couple. It has been admitted by hon. Members on both sides of the House that these increases are definitely substantial. I welcome them, and I am sure that we all wish this Bill a speedy passage through the House, and hope that the Minister will go ahead with his plans for making the payments to the old-age pensioners.
I am glad to think that the Report of the Phillips Committee, which dealt with the economic and financial problems of old age, will be the subject of a much longer debate next year, but there is one aspect of that Report which caused a little concern. I am glad that the Minister made it absolutely clear that he has no intention whatever of interfering with the present retirement ages of 65 and 60. From one or two of the speeches made from the other side of the House this afternoon, particularly that of the right hon. Gentleman the Member for Battersea, North (Mr. Jay), I thought their attitude towards this problem was far from clear.

Mr. J. Griffiths: I heard the speech of my right hon. Friend the Member for Battersea, North (Mr. Jay) and he was quite clear about that.

Mr. Drayson: I am glad to hear the right hon. Gentleman say that he was, but I thought he used a form of words which certainly left an element of doubt, from the intellectual point of view, suggesting that the matter ought to be further considered.

Mr. Keenan: Put "common-sense" in place of "intellectual."

Mr. Drayson: We will leave it at that. What I was going to say was that we had far too much of the intellectual from the party opposite when they were in power and not enough common sense in the way in which they handled the nation's affairs.
Reference is made in the Report, and many speakers have mentioned it today, to the staggering cost of old-age pensions in the years to come. In 25 years' time,

on the present basis, the cost will be over £1,000 million. The party opposite have done their best to confuse the issue as to who is actually paying for this increase at the present time. A lot of play has been made about the Exchequer supplement, and there have been hints that there may be industrial unrest unless the contribution is reduced, or unless the Exchequer supplement is increased, which would have the effect of a reduction in the increased contribution, by perhaps as much as 1¾d.
The suggestion has also been made that the distribution of the increased contribution is unfair, but, of course, the party opposite have purposely left out the fact that, quite apart from the Exchequer supplement, which is a fixed sum, there are also the Exchequer grants, which are an unlimited liability in making up any deficit that may occur. It may be that, in the immediate 12 months, the deficit will not be very large, but it is a steadily increasing figure, and there is no limit to the Exchequer liability on this particular account.
The party opposite always try to shift the burden of social security on to other shoulders, but, of course, it is only our own shoulders, those of everybody in the country in employment or paying taxation, that will have to bear the burden of these increased benefits and all the other requirements of the national Exchequer. We all have to pay in the end, whether it is done through taxation, by contributions to an insurance scheme or any of the other methods of raising money.
The Financial Secretary to the Treasury told us yesterday that the Bill, far from diminishing the cost to the Exchequer, will substantially increase it, and that expenditure from the Fund will rise next year from £550 million to £652 million, an increase of £102 million. By the time we come to 1959–60 the figure will be £800 million, and by 1979–80 it will be £1,093 million.
My hon. Friend also reminded us that the increased contributions of 52s. per year will earn a man an increase of £19 10s. a year on retirement, and I think that is a very considerable bargain for an increased contribution of 1s. a week. At present for most people drawing pensions the Exchequer is paying 95 per cent. of the present pensions, and not a


single one of those people will be receiving less than 85 per cent. of their pensions from the Exchequer.
I suggest that the party opposite bring these things in to create confusion, and we have had some indication of that in the speech of the right hon. Gentleman the Member for Ebbw Vale (Mr. Bevan) and others who follow him in the idea they have put forward on this subject. It is quite clear that they are at sixes and sevens among themselves, whereas we on this side are all at "seven and six" for the old-age pensioners.
I am glad that the Minister has stressed his determination to maintain the insurance principle in this Scheme. This is different from other insurance matters, because, as has been constantly pointed out, it is a compulsory insurance, and, therefore, there is an obligation on those who compel contributions to be made to see that the benefits keep pace with any increase in the cost of living. Nevertheless, it is essential that payment should be made by virtue of contributions, and should not be regarded as a dole to be subject to a means test and paid out by the favour of an official when the individual applies for it.
We have heard of the changing structure of the nation by the increase in the number of old people, but I prefer to think that we have not got an ageing population, but that old people are growing younger. While all those who wish to retire should be able to do so, those who stay at work should not be penalised. I was able to give some examples of this desire to remain at work when we discussed the position of old people in employment in February of this year, and many of my own constituents constantly complain to me about the fact that if their earnings exceed the £2 per week limit, it involves a deduction in the pension.
If we say that this pension is received as a right by virtue of payments made, I do not think any limit should be imposed on the amounts that can be earned by those who stay at work. Particularly should this be the case in the textile industry, because I am told that there are many weavers who could do a good job, though perhaps unable to handle as many looms as in the past, who could make a very useful contribution to our national

production, but who are deterred from doing so by the limit which is at present imposed.
There is a lot to be said for the reservations made by Professor Cairncross in the Phillips Committee's Report on this subject. It is not a question whether to retire or not, but how much to retire when one reaches the retirement age, and I hope it will be possible for the Minister to alter that particular aspect of the insurance scheme, obviously, not in this Bill, but perhaps by regulations some time in the New Year, when we have had an opportunity of discussing the Report of the Phillips Committee in full.
I conclude by saying that I hope that the Bill will go forward as speedily as possible, that the Minister will see that there is no delay in making the increased payments in the New Year, and that, if the country goes on investing in a successful Government and a sound economy, these insurance benefits can be enjoyed for many years to come.

7.50 p.m.

Rev. Llywelyn Williams: It seems to me that the atmosphere in which the debate has continued today is slightly more amicable than it was yesterday. The explanation of yesterday's atmosphere is probably the fact that in introducing the Bill the Minister made a very unfortunate reference to the T.U.C. It was certainly not a very propitious way in which to begin a serious discussion on this very important problem.
We on this side of the House have been taunted by hon. Members opposite for not showing appropriate gratitude for the proposed improvements in the Bill. I can assure the Parliamentary Secretary that there is certainly no lack of gratitude on our part. We have never been lacking in readiness to show gratitude when discussing Measures designed materially to improve the working and living conditions of our people.
A very eloquent instance of that was the genuine praise given to the Minister of Fuel and Power for all the first-class work done on the Mines and Quarries Bill. That can be explained partly by the fact that the Minister of Fuel and Power did not see fit to speak in such derogatory terms about the T.U.C. as,


unfortunately, the Minister of Pensions and National Insurance did yesterday.
As has already been said from this side of the House, we welcome, of course, those provisions of the Bill which will make life easier for those who, in many senses of the word, are in the more unfortunate sections of the community. We appreciate the additional benefits, the 11s. increase in retirement pension rates for a married couple, and the higher rates for sickness benefit, unemployment benefit, industrial injuries benefit, and so on. But our job as an Opposition is to try to show, to the best of our ability, how the Bill could be improved.
We do not believe that this is the best Bill that could have been brought before the House. We have serious criticisms to make of it, and hon. Members opposite should at least give us credit for being constructive in our approach to this very important and major Bill. After all, this country took a tremendous step forward in social revolution when my right hon. Friend the Member for Llanelly (Mr. J. Griffiths) introduced the 1946 Bill. Surely, we of all people have the moral right to take the most absorbing, serious interest in anything which influences the life of our people, and particularly of those to whom I have referred as the less fortunate members of the community.
One of our criticisms of the Bill—to which repeated reference has been made from these benches—is its timing. The Parliamentary Secretary made out quite a convincing case, which I personally accept, regarding the difficulties in the mechanics of administration. He said that he had personally investigated that side of the matter and that he was fully convinced that administratively these provisions could not be operated much before next April.
Though I accept what the hon. Gentleman said as far as the administrative mechanics are concerned, it does not nullify our contention that the Government should have taken steps last April to meet the undoubted moral claim of the people to a very substantial increase in pensions, etc. No Minister, no hon. Member opposite would dare deny that he did not know as far back as last March or April that something would have to be done in this direction. Had the necessary action been taken at that time, the actual operation of the provisions of the Bill would now be a reality. Instead, there

are 4½ million old-age pensioners who will have to live on expectations until next April.
It is no use the Parliamentary Secretary or any other hon. Member opposite taking us to task for emphasising that point. As I say, I accept the explanation of the Parliamentary Secretary about the administrative difficulties, and I think that he was fair to the House, but we do not budge from our belief that the Government's procrastination in the matter has caused and will cause much suffering, and, indeed, was unjustified and unnecessary. That, I believe, is our major criticism.
While I, like other of my hon. Friends, gratefully acknowledge the proposed increase in benefits, I do not regard them as sufficient. We are grateful for what they will do towards making life easier for people, but we insist that they are not sufficient. I listened with interest to the case adduced by my hon. Friend the Member for Walthamstow, East (Mr. Wallace) who took up the very serious question of what we in this House in 1954—not 1951, 1946 or 1938—mean by subsistence. That is the real crux of the whole pension and social insurance system of the country.
I assume that the National Assistance Board would regard its scales as being the minimum on which people can possibly exist. Paragraph 5 of the Memorandum on the Bill gives the case of a married couple with three children. That, of course, must be statistically correct, but I should like to see a more typical case. In the example quoted the family would receive 118s. 6d. in National Assistance benefits. If we take the case of a married couple without children—or whose children have grown up, married, and have their own responsibilities and so cannot help their parents—the total amount they will have to live on, including the 12s. rent allowance, is £3 15s.
I find it very difficult to believe that anyone could claim that two people could live on that sum, but that is the maximum benefit allowed under National Assistance—and it includes the rent allowance. It is true that, occasionally, there are some special clothing allowances, but they do not meet this serious problem. After all the experience we


have had since 1946, and now the publication of the quinquennial review, I believe that the House must really get down to this most urgent question of deciding what we, as civilised, socialised people, mean by a subsistence standard.
I resent, and I am sure the old people must resent, the continued references to their increasing dependence on the working population as the years go on. After one has worked hard, sometimes in very difficult conditions in heavy industries, this feeling that one is dependent on other people must be terrible. I believe it to be bad psychology, and the Ministry should not over-emphasise the fact that, in future years, so many old people will be dependent on a decreasing number of working population. It is a very unfair attitude to take.
The 1946 Act was so comprehensive, so remarkable a creative piece of work of social legislation that we really need to consider the problems very seriously. As my hon. Friend the Member for Houghton-le-Spring (Mr. Blyton), and my hon. Friend the Member for Bedwellty (Mr. Finch) said yesterday, the Bill has been decided on, for the next five years, before a serious analysis of the Insurance Fund can take place. The final structure of the Fund has already been decided for the next five years. That is too premature and is most strongly to be deprecated.
My hon. Friend the Member for Cardiff, West (Mr. G. Thomas) raised the very serious point of how we are to finance the Insurance Fund. I hope that I am not committing my party in any sense that I should not, but we have no closed mind on this subject. We are exploring the subject. And why should we not? Why should we be rigid and doctrinaire? In our party and among all thinking people there is an amalgam of varying ideas on the matter.
How is the job to be done? A good case can be made out for some measure of the contributory system, but I believe that the Exchequer should contribute more generously to the Fund. Although it is still in the realms of discussion and speculation there is a lot in the reference my hon. Friend the Member for Cardiff, West made to the possibility of a graded, instead of a flat rate, system of contribution. For example, a steel worker in

Margam, who earns his £20 a week, contributes no more than does the railway porter and other low wage earners. I am not convinced that that is equitable.
It may be that we can devise some sort of social tax but, whatever our final judgment may be, let our approach to the problem be free from any miserable taunting of one another just because one man may emphasise one aspect more than does another. Before reaching a final conclusion on social insurance we have a lot of thinking to do, but we have a very fine background which will help us to reach the right conclusion.
My final criticism concerns the amount of increase in the contributions to be paid by the employed, insured workers. Hon. Members opposite have said that this 1s. increase is so infinitesimal that it is not worth talking about, but I do not think that it can be dismissed quite so easily or peremptorily. As has already been pointed out, the situation is arising in industry where abnormal overtime is becoming, by usage, the normal way of working. From my conversations with industrial workers, I can assure the House that they are becoming very restless about that. If hon. Members opposite think that they can take for granted that overtime is divinely ordained and here to stay, I can assure them that they must recast their thoughts.
I speak very often to people in such low wage groups as bus conductors. They tell me they have to work overtime or they could not possibly live adequately. This 1s. comes on top of the contributions they already have to pay for national and industrial injuries insurance, which, in the case of a bus conductor or railway porter, is 6s. 9d. a week. It is a considerable item to them, particularly when there is the very serious possibility of increased rents in the near future, the prospect of an increase in the cost of living, and higher prices for necessaries. That does not make this 1s. the small and trivial matter which I sometimes think hon. Members opposite have been inclined to regard it.
I do not think that we have really considered how much the new proposals will mean to the self-employed person. A self-employed person over 18 years of age will have to pay 8s. 5d. a week. That is a very serious cut from the wage of


any self-employed man, be he hill farmer, crofter, small shopkeeper, or—and now I speak with some authority—an ordinary minister of religion in Wales, earning £300 a year, who, having regard to his educational attainments and studies is probably the poorest paid member of the community. I know of scores of such instances. I make no apology for adding my criticism to those already levelled at the Government because of these increased pensions.
The Minister has given me the impression that he feels a bit aggrieved at the reception which the Bill has had. It has been a mixed reception. We have paid our tribute to the features in the Bill that we warmly commend and approve of, but we have many serious reservations about it, and we hope that next week in Committee we shall do more than air our grievances, that we shall convince the Government that some of these injustices and anomalies should be removed, and that when we come to the Third Reading and Report stages we shall be able to be more lavish with our praise and certainly more spontaneous in our appreciation.

8.12 p.m.

Mr. C. J. M. Alport: I hope the hon. Member for Abertillery (Rev. Ll. Williams) will believe that we in no way resent the criticisms he advances, like other of his colleagues, against this legislation promoted by a Conservative Government. Indeed, we realise that that is the proper attitude of the Opposition.
At the same time, I hope the hon. Gentleman will realise also that if we did resent anything in his speech, it would be the assumption on his part that he and his party have a better right to safeguard the social interests of the people than we have. We feel that the Labour, Liberal and Conservative Parties have all made their contributions to the creation of a structure of social security in Britain of which we are all proud and which we wish to see operated in the best way to achieve the objects we all have in mind.
It is worth noting that in all the speeches I have heard from the opposite side of the House, the emphasis has always been upon the problems of old age. I could not agree more that those problems loom largest in the social sphere at present. But I think it is important that the country should realise

that this Bill is not merely an answer to the pressures which are exerted from the benches opposite on behalf of the old-aged, but that it comprehends all those who are in need. Whereas the speeches to which we have listened have pressed the interest of a section of those in need, our Bill properly promotes the interests of all categories who fall under the umbrella of social security.

Mr. Thomas Steele: Does not the hon. Gentleman agree that the Bill does not give any increase at all to the non-contributory pensioner who is over 70 years of age and perhaps has only his pension to exist on?

Mr. Alport: It covers all those who are subject to insurance. After all, this is a National Insurance Bill. Therefore, my claim is a perfectly reasonable one—I do not wish to be particularly controversial—which contrasts with the wording of the various Motions of censure which have been promoted by the party opposite relating only to old-age pensions.

Mr. Steele: Mr. Steele rose—

Mr. Alport: I have very little time. I must be allowed to continue my speech.
One other point I should like to make is with reference to the argument which has been advanced by hon. Members opposite that we have maintained the contributory principle. It is very notable that the enthusiasm which has been shown in a number of speeches from the benches opposite for the taxation principle as opposed to the contributory principle is very new. Although it goes back into the history of the Labour Party, it certainly was not much in evidence during the debates in 1946 or, from my own personal knowledge, during the debates in 1951.
Although there are many arguments in favour of some alteration in the present basis of the contributory principle, I do not think hon. Members opposite are entitled to chide us for not accepting what is a very revolutionary approach to the whole question of financing social security which they themselves specifically rejected when they had an opportunity to deal with that problem.
I want to address myself shortly to two aspects of the matter. The first is the level of the benefit. I think it is acknowledged on both sides of the House—I


hope so—that the level of the benefit for the old-age pensioner—indeed, it would apply to the other categories as well—is not a subsistence level in the full sense of the term. I do not think that the subsistence level is the right test in any case for the level at which the benefit should stand. The test which I advance, with all diffidence, is this. Does the level of the benefit received in respect of a retirement pension allow the person enjoying that pension a reasonable standard of living, assuming that he is able to supplement the pension from income from savings without constant recourse to the use of capital? I hope that the House will feel that that is not an unimportant point.
I have felt that the hardest hit section of the community are those who have constantly to watch their savings dwindle away during their retirement, in order to supplement the level of the old-age benefit. It is reasonable in society to expect that in a working life of 45 or 50 years a man should be able to put aside a certain amount in savings against old age. I think it is an essential social discipline. I think it is essential for the economy of the country as a whole. Therefore, the level of the benefit should assume that a man or woman has been able over a period to put aside something to help supplement a pension after retirement. In the event of their not being able to do that, through sickness or through some other of the tragedies of life, there is the National Assistance supplement to which they may have recourse.
What should not happen is that the level of retirement benefit should be so low that the reasonable accumulation of private savings of the individual is dissipated in a relatively short period because the person concerned is forced to use those savings to supplement the pension level. I hope I have made that point reasonably clear, because I am sure that the savings element is of vital importance in considering the whole question of old-age pensions. Is it reasonable to suppose—if any test is of any value at all—that the present levels of benefit are sufficient to safeguard the reasonable savings of the individual after retiring?
I do not claim to be able to emulate Lord Beveridge in any way, but in 1952 I made a survey in my constituency, in conjunction with nine old peoples' clubs, and we tried to find, by the evidence provided by the pensioners themselves, what was necessary to maintain them at a reasonable minimum standard of subsistence. It may not be reasonable in the eyes of many people, but it was reasonable from the point of view of the old-age pensioners themselves. The figures we obtained were that for an individual, in 1952, the weekly income should have been in the neighbourhood of 46s. and for a married couple should have been about 64s. 6d. I do not pretend that these are very accurate figures, but I think that an addition to represent the rise in the cost of living since 1952 would make those figures about 50s. and 70s. respectively.
It would be reasonable to suppose that during the space of their working life the average couple would be able to save sufficient to bring in an income of roughly £25 a year. That is a very modest figure and it requires a total capital of £500, £600 or £700. With this sum they should be able to supplement their pension by about 10s. a week.

Mr. Keenan: Does the hon. Gentleman remember what went on in the 1920's and 1930's for those people who are now 65 or 70? Can he expect any of them, or at any rate more than a few of them, to have been able to save a sum to bring in an income of £25 a year?

Mr. Alport: I can give only my experience, and I have tried to study the subject as carefully as I can. A great number of them have been able to save, not only in a period of economic difficulty, such as the 1920's and 1930's, but also in the war years. They have been able to accumulate a sum in that neighbourhood. I think this is a reasonable basic assumption. In any case, I put it before the House, and if hon. Members do not agree, it is perfectly open for them not to do so.
If this assumption is correct, I would say that the present levels of benefit are sufficient to safeguard the reasonable savings of an ordinary individual or an ordinary couple in retirement. I say that taking the subsistence level at 50s. and 70s. respectively. But if the present levels


are not sufficient, then the time will very shortly come when we shall have to reconsider the level of pensions.
Perhaps I may now turn to a different aspect, that of contributions. I said earlier that the idea of meeting the financial burden of social security out of taxation is relatively new, at any rate in public discussion. The idea has been put forward many times in the past but it bas been introduced now in a more alert and convincing way. No doubt the mesmerism of the Beveridge Report was sufficient to exclude it from our minds in the years immediately after the war, but the arguments were advanced by my hon. Friend the Member for Wolverhampton, South-West (Mr. Powell) in a recent debate, in which he made a very convincing speech. I feel, from speeches made on both sides of the House in this debate, that he convinced a great many hon. Members that the insurance principle is no longer a reality in National Insurance. The right hon. Member for Ebbw Vale (Mr. Bevan) advanced the same point of view rather more dramatically and in rather a more picturesque manner.
If it is true that the insurance principle is no longer fully accepted on both sides of the House, it seems to me strange that we should still be trying to calculate the contributions, which are a tax, on an insurance basis. The Minister gave us plenty of evidence that he himself does not regard the actuarial computation of the contributions as sacrosanct. In his speech yesterday he said that a 50 per cent. increase would have made the benefit not 40s., as proposed by the Government, but 39s.; and he said that the Government had therefore rounded the figure off so as to make it an easy figure, presumably from an administrative point of view. Surely that is evidence that this is not strictly an actuarial basis for the benefit.
Later in his speech, my right hon. Friend said:
The most that anybody, even together with his employer, can have paid into the Fund today is £140, and in 20 years' time the maximum which anybody could have paid into the Fund, with the new contribution rate and together with his employer's share, will be £700 altogether. That shows what a fine bargain National Insurance still is."—[OFFICIAL REPORT, 8th December, 1954; Vol. 535, c. 980–1.]

That is perfectly true; it is a very fine bargain, but it is certainly not insurance. If that is the case, it seems to me to be strange that we should still be trying to calculate the contributions upon an actuarial basis when we should be basing them upon the normal principle of taxation.
By that I mean that the normal principle of taxation in this country is that the incidence of the tax should fall on a basis of gradation, so that the least well-off suffer the least in impact of tax. I therefore have great sympathy with the idea put forward by my hon. Friend the Member for Reigate (Mr. Vaughan-Morgan), which has also been advanced by a number of hon. Members opposite—the idea that we should try to find some means of preventing the tax from falling, as it falls at present, most heavily upon the section of the community which we most want to help and which, in fact, is the poorest section of the community.
To illustrate the point further, as the hon. Member for Mansfield (Mr. B. Taylor) did in winding up for the Opposition yesterday, I draw the attention of the House to the particular difficulties in which the self-employed and non-employed will find themselves. Under the Act introduced by the right hon. Member for Llanelly (Mr. J. Griffiths), the small income exemption limit was £104 a year. I think I am right in saying that that limit has not been raised since, but contributions have been raised very substantially. My calculations may not be particularly accurate, but so far as I can see someone who has an income of £150 a year and is self-employed will pay something like £20 a year in tax which, for the sake of this Bill, we call an insurance contribution That is a very substantial amount to ask such people to pay.
If they are non-employed, although the amount of the contribution they have to pay will be something like £13 instead of £20 a year, the probability is that in many cases they will have a smaller income than the self-employed. Of course, I am not thinking of the well-off non-employed, but of the category with which we are all familiar—many of them widows—who are trying to make ends meet by ekeing out some small pension or capital left to them by their husbands


and trying to make a little extra by casual work.
This Bill does not increase the small income exemption level. I think that £120, or probably £140, a year is more in accordance with the present situation. I am certain there will be considerable hardship involved for a great many people-who are the poorest in the community unless some action is taken. It is something that should be done although it would be to their disadvantage if they were taken out of the insurance scheme. A better alternative is to find some means of tempering the wind of contribution to the difficulties which that class of the community have to face in meeting contribution obligations.
I therefore ask my right hon. Friend—at a later stage, but as soon as possible—to try to ensure that this social problem is dealt with as sympathetically and effectively as possible. My reason for not wishing to press the proposal too urgently at the moment is because it would lead to recasting the whole basis of contributions to National Insurance. We should do it on the principle which my hon. Friend the Member for Wolverhampton, South-West suggested. Although we do it by a method more attuned to taxation principles and less attuned to an insurance premium basis, I hope that at the same time we shall not abandon the contribution principle from the Scheme as a whole. I see no reason why we should not base the payments on a taxation principle whilst at the same time maintaining the idea of contribution.
I am certain that one of the reasons why right hon. and hon. Members on both sides of the House would be extremely unhappy in even considering the possibility of raising the age of retirement is primarily because we know that a Government—of whatever political complexion—has a moral obligation to fulfil the contract made in 1946 with regard to the retirement ages of 65 and 60. It may be possible for Parliament to make these changes at any time it wishes. I fully accept that, but I still think there is a strong moral sanction on Governments not to monkey about too much with the benefits and contribution levels to the disadvantage of beneficiaries. There is generally felt to be a moral obligation resting on them to carry out

the contract made between the Government and the contributor.
If we could link the two ideas of contribution on the one hand, based upon an obligation on the part of the Government to provide certain benefits in return for certain payments to the beneficiary, but on the other hand produce the pattern of payment of contribution on a taxation principle so that it is graduated down to protect the interests of the least well off, we would find a better and more humane basis for the whole of our financing of National Insurance. That, I hope, is something which my right hon. Friend and those who advise him will be considering, perhaps during the course of debates on this Bill, and certainly during the discussions we may have on this problem in the immediate future.

8.40 p.m.

Mr. Albert Evans: We have just heard a most interesting speech, from which it is evident that at least a few hon. Members on the other side of the House are really thinking of some of the problems involved in our social security schemes. Although one would not commit oneself immediately, I would say to the hon. Member for Colchester (Mr. Alport) that I agree generally with his idea that the contribution, even if only a token contribution, should be retained.
I take that view chiefly because the contribution fosters in the contributor a sense of entitlement, and I think that that is necessary. It gives to the contributor the idea that he is entitled to a pension at a certain age, and that is a valuable thing from the contributor's point of view.
My main purpose in intervening in the debate is to lay at the feet of the Minister my major charge in the matter of the Bill. I will say nothing about contributions or benefits—they have been adequately discussed, and we will be dealing with them in Committee; but I have waited a long time to tell the Minister quite plainly that he is far too late in presenting this Bill to the House.
The right hon. Gentleman has known for over 12 months that there has been serious hardship among certain sections of the people. He has delayed to such an extent that the old people, to protect some of their numbers, have been gathering their pennies together and have


been forced to public agitation. Similarly, with the British Legion. I regret that the British Legion found it necessary to have to come out into public agitation on this matter. During the past year we saw the British Legion coming out on to the streets and into the public arena because it realised that some of its members were suffering undue hardship.
The Minister knows that the charge of being dilatory in presenting the Bill is one that he must meet. He tried to meet it yesterday. In fact, in opening the debate, the first point which the right hon. Gentleman dealt with was the charge that by his delay he had caused unnecessary hardship to people throughout the country. The right hon. Gentleman said:
Some criticism has been made of the timing of this Measure. As Minister, I am not a free agent in the matter of the timing of the Bill. My duties were laid down in the Statute of 1946, and I cannot act under Section 40 of that Act until the Government Actuary has made his report under Section 39 to the Treasury. …"—[OFFICIAL REPORT, 8th December, 1954; Vol. 535, c. 961.]
The Minister sought to hide behind Section 39 of the Act and declared that he could not take action until he had received the Government Actuary's Report.
One would have thought that before replying to the charge of being unnecessarily dilatory in bringing in the Bill, the Minister would have taken the trouble to examine the Act which he was quoting. He should know that the very Section from which he quoted made special provision for the Government to ask for the Actuary's Report at any time in advance of the end of the five-year period.
It is true, as the Minister said, that, according to Section 39 of the Act, the Government Actuary had to present his report to the Minister at the end of five years, but there is a very important proviso to that Section:
The Government Actuary shall … five years from the appointed day … make a report to the Treasury. … Provided that the Treasury may at any time direct that the period to be covered by a review and report under paragraph (a) of this subsection shall be reduced and that the making of that and subsequent reviews and reports under that paragraph shall be accelerated accordingly. …
Despite his reply yesterday to the charge of being dilatory, the Minister must have known that it was within his competence

at any time to have asked the Government Actuary for a report, and that it was within his competence to have dealt with the matter in the summer, when it could have been dealt with more easily than now.
So the main criticism the Minister has to face lies not so much against the contents of the Bill, although there are defects in it, but is that month after month, while hardship was suffered by the people, he delayed action and tried to excuse himself by Section 39 of the Act, knowing full well all the time that it was within his power to receive the Report of the Government Actuary at any time he needed it. The people will not be deluded by his excuse.
Hon. Members opposite are attempting to claim credit for the Bill. They are saying that a Conservative Government are bringing in the best National Insurance Bill ever. Let us be honest about this if we can. Let us agree that the Government had to bring in the Bill, that they dared not allow time to run on any further without dealing with this matter. Indeed, no Government today dare attempt to avoid the obligation to see that social security payments are adequate.
We assumed, in 1945, the responsibility for seeing that anyone in want should receive from society some measure of security, and no Government today can avoid that obligation. Therefore, hon. Members opposite really cannot claim any credit in this matter. The credit is surely due to the pioneers of social insurance, the Liberal Party in its great days, the Socialist agitators then and later, and, finally, to Lord Beveridge, who put the ideas of security into written form.
The country will judge the Government not by the Bill. It will judge no Government in this matter of insurance by whether or not they do their duty which they cannot escape, but by whether they are early or late in doing what they must. I hope that the Minister will look again at the principal Act to see for himself that either he deliberately misled the House about having to await the Actuary's Report or he was not fully conversant with the details of that Act.
We see from the Bill that the Minister has gone somewhat beyond the point to which he needed to go to bring up the


benefits to their 1946 value. He has gone a little beyond what the Interim Index of Retail Prices required. The Index is at present 46 per cent up on 1946 whereas the benefits are to be more than 50 per cent. up on 1946 prices. It is fair to ask why the Minister has done this. Why has he gone beyond the level which was required to meet the point to which the Index had risen?
Does it mean that at long last the Minister recognises that that Index is no longer a fair measure of the level at which people can live adequately? If he recognises that the Index is no longer valid to measure the level of payments for subsistence, perhaps he will tell the House. Or does it mean, as I suspect, that this little extra will enable him, if he is still in office, to run for another two years with another long wait before he acts? Is that the purpose of his giving a little more than he need have done? I rather fear that that is the explanation, though I hope that it is not.
I know that later we shall have a fuller opportunity of discussing Assistance scales, but I think the House must constantly keep in mind that we have dependent upon supplementation from National Assistance 2 million adults and 400,000 children. Most of them are the most unfortunate of our people, the old, the sick, the widows and the disabled, and because they are the poorest section it is our business to give them our special attention. In the opinion of many hon. Members the proposals which the National Assistance Board has made to the Minister are inadequate. It is for the Minister to tell the Board to think again and present other proposals.

8.48 p.m.

Mr. James Griffiths: We are reaching the final stages of a two-day debate, and I apologise to those hon. Members who would still like to take part in our discussion, but the Minister, understandably, wants a certain time to reply, and therefore I thought that, speaking from this Box, I was entitled to take some quota of the time too.
We have had a large number of speeches and the debate as a whole has been on a very high level. I will not single out any hon. Member for special praise, but there have been speeches, to which we have listened with rapt atten-

tion, which have shown great knowledge and experience of this subject. The debate has ranged over three aspects of the problem, which are embodied in the Bill and indeed, go beyond it.
First, there has been a good deal of criticism of the Government on the timing of the Measure. Secondly, there has been consideration and a good deal of pointed criticism of the provisions in the Bill and, in particular, of its financial structure. Thirdly, the debate has ranged as it was bound to do and as it was desirable that it should do, outside the scope of the Bill to the many large and complicated problems which require attention now that we have reached this interesting stage in the history of National Insurance.
As one who eight years ago, just before this time of the year, completed several months of very hard work drafting the 1946 National Insurance Bill and who piloted it through the House and began to bring it into operation—in October of that year—it has been interesting to listen to the comments upon the 1946 Act. It has been praised whole-heartedly by some and condemned by others, and there have been all kinds of varying comments upon it in between those extremes.
It was a new venture. My job was to translate the Beveridge Report into legislation. Indeed, the 1946 Act was all Beveridge plus something extra. It was the first attempt by that method and on those principles to apply the National Insurance Scheme to the whole population. It had never previously been attempted in Britain, and I do not think it had ever been attempted anywhere else.
It was inevitable that in the light of experience we should find a lot wrong with the Act. For that reason, as well as other reasons, I provided in the Act that after it had been in operation for five years there should be an opportunity to review its financial provisions in the light of experience and all the aspects of its working, including the most important aspects of the level and the amount of benefits at the end of five years when there would be a quinquennial review. We are now at that stage, and I want to devote some part of my remarks to that aspect.
First, I will deal with the timing. For very many months the Opposition have pressed the Government to bring in an


interim Measure in view of the situation caused by increases in the cost of living, some of them due to actual policies of the Government. It should not be forgotten that it was the Government who, in defiance of the pledge they gave to the country, reduced the subsidies on food. Consequently, in view of the continuing and increasing hardship among pensioners and others receiving benefits—the situation was accepted by everyone—there was need for a Measure speedily to raise the level of benefits.
That view was accepted as long ago as March by the House—it was accepted unanimously—and by Government on a Motion submitted by my hon. Friend the Member for Southampton, Test (Dr. King) in an excellent speech in an excellent debate. The Government having accepted it, we left the House that day with the very definite impression that immediate action would be taken it has clearly emerged from this debate that the Bill is an interim Measure.
My hon. Friends have indicated that we do not propose to divide the House on Second Reading, but when we take the Committee stage next week we shall bring forward Amendments raising a number of issues and shall take full advantage of the time available in the Committee and remaining stages. It is our desire that the interim Measure shall reach the Statute Book as quickly as possible. While we want to use every moment of the time available, there will be no obstruction from the Opposition to the Bill's passing and obtaining the Royal Assent.
I must make it perfectly clear that we accept the Second Reading on the definite understanding that we regard the Bill as an interim Measure without prejudice to further consideration of the Reports which have been presented to us and the many issues which they raise and also the many things which we have learnt after five years' experience of the operation of the 1946 Act. Our case all along has been that we ought to have an interim Measure.
There is at times selective reading from "Challenge To Britain." That publication in July, 1953, said three things. First, it said that the Labour Government would immediately restore the benefits to the purchasing power which they commanded in 1946. Secondly, it said that we would

take steps, because of our experience, to ensure that that real value was maintained from year to year. Thirdly, we said that when the quinquennial report was available to us we should be able to review the whole scheme in all its aspects, including the anomalies, and meantime that there should be an interim Measure to raise benefits.
The Minister has said all along that he could not produce an interim Measure because he had to wait for the quinquennial report, in particular, if not for the Phillips Report as well. Yesterday, in his opening speech, the Minister used words which have already been used by my hon. Friend the Member for Islington, South-West (Mr. A. Evans) and which were, "I am not a free agent. I could not bring in the Bill. The Act of 1946, under section 40, tied me up." I am summarising, but that is the essence of what the Minister said. He went on, "Therefore, I had to wait before I brought in the Bill." The Minister knows that he need not have waited. He could have done it. What did he do in 1952? He did not wait then for Section 40. He could have done it in this case. Not only was it not necessary for the Minister to wait until he had those reports; in fact, he did not wait.
I want to get to the timetable. What is the timetable, on the basis that the Minister said, "I cannot prepare this Bill until I have the quinquennial report"? Here are the dates. I have checked them up again. Perhaps the Minister of Health will comment upon them when he replies. I have the documents here. First of all, we had the quinquennial report. On page 30 of it we get the signature of the Actuary and the date on which he signed it. The Government could not have seen the report before the Actuary signed it. I assume that, anyhow. The Minister said that he had not seen it when we had the debate in November.
The date on which the Actuary signed the report was 15th November, 1954. I assume that the Minister did not see it until 16th November, at the earliest, and surely not before the Actuary signed it. Yet four days before the Actuary signed this report, namely, on 11th November, the Minister of Defence spoke in the by-election at West Derby. The Minister of Defence is not here tonight. He has taken part in other debates. These things are


on record. The Actuary's Report was signed on 15th November. The Minister of National Insurance says, "I cannot bring in the Bill before I have the Report, yet four days before the Actuary signed the Report the Minister of Defence said, at the West Derby by-election:
When you see the details of our proposals, you will be satisfied.

An Hon. Member: Quite right.

Mr. Griffiths: It is quite clear that the Minister of Defence, who is a member of the Cabinet and has taken part in the two last debates which we have had in this House, knew the details. [An HON. MEMBER: "No."] He spoke about them at West Derby, and he said so. What do these words mean, "When you see the details of our proposals"? He meant that he had seen them himself. [An HON. MEMBER: "No."] If he had not, he misled the electors of West Derby.

Mr. William Ross: Is my right hon. Friend aware that, a few days before that, the Minister replied in the same way to a supplementary question by my right hon. Friend the Member for East Stirlingshire (Mr. Woodburn)?

Mr. Griffiths: I leave that on the record. It is clear proof that the Bill could have been presented months ago and that the increased benefits could have been in payment now.
As I have said, we regard this Measure as an interim one, and I hope that the Minister will confirm that. Does he regard the Bill, and the document which accompanies it, as a fulfilment of his obligations under Section 40 of the National Insurance Act, 1946? This is a rather important issue, and I want to spend a little time upon it. Section 39 provides for the quinquennial review and Section 40 says:
As soon as may be after a copy of any report under paragraph (a) of subsection (1) of the last foregoing section is laid before Parliament, the Minister shall review the rates and amounts of benefit in relation

(a) to the circumstances at the time of insured persons in Great Britain, including in particular the expenditure which is necessary for the preservation of health and working capacity; and.
(b) to any changes in those circumstances since the rates and amounts of benefit were laid down by this Act or any Act amending it and to the likelihood of future changes.

(2) On the completion of any review under this section the Minister shall lay a report thereon before Parliament."
Curiously enough, in the course of this debate no one has referred to the fact that the Minister has so reported—if it can be called reporting. The Minister himself did not refer to the fact that he had made this report.
As its author, I regard the obligation which is laid upon the Minister, Parliament and the nation under Section 40 of the 1946 Act as very important. I always envisaged this Report as being a comprehensive one, after a comprehensive review had been carried out by the Actuary, and by other means, of the whole working of the Scheme during the five years, and as containing ideas and suggestions about its future. How many hon. Members know that the Minister has reported under Section 40? I suppose that there are very few. My complaint is concerned with the character of the Report, which is Command Paper 9338.
In large type on the front page there appear these words:
Memorandum on the National Insurance Bill, 1954.
In smaller type there follow the words:
Report by the Minister of Pensions and National Insurance on his Review of the Rates and Amounts of National Insurance Benefit.
Appendix I is headed:
Report pursuant to Section 40 of the National Insurance Act, 1946. …
I have it here. It consists of two pages—that is all. This is a serious matter for Parliament and the nation. This is an enormous scheme, which touches everybody in so many ways. It is the biggest scheme that has been known in this country or anywhere else. After five years the Minister is under an obligation to report upon it—and this is all that we have got.
When was it written? I should like to know. Was it before or after the quinquennial review was received? I am asking this question quite seriously. It was written in a hurry. It has not even a date upon it. It merely refers to "December, 1954." What was the date in December, 1954? How much time elapsed between the publication of the quinquennial review and the publication of the Report pursuant to Section 40?
In order to enable him to review the working of the Act and to consider its future, and suggestions about its future, the Minister took three other steps, all of which I commend, because I think he had a right to take them. First of all, they set up the Phillips Committee. When this was first announced, I asked a question whether that task ought not to be entrusted to the National Insurance Advisory Committee set up under the Act itself. The Government took a different view, and I do not quarrel with that. They set up the Phillips Committee in pursuance of their responsibilities under Section 40 of the Act. What for?

Mr. Peake: The establishment of the Phillips Committee had nothing whatever to do with the review under Section 40, which is limited to the rates of benefits under the Act.

Mr. Griffiths: No. Section 40 does not just say the Minister is to review the rates of benefits, but that he is to review certain criteria, including—
in particular the expenditure which is necessary for the preservation of health and working capacity
and also to have regard—
to any changes in those circumstances since the rates and amounts of benefits were laid down.
In addition, the Minister has referred certain matters, which certainly are connected with the review provided for under Section 40 or some other Section, to the National Insurance Advisory Committee. We have not had a report from the Committee. I do not blame the Minister, but I say we have not had it.
Another thing which, quite rightly, the Minister has done—I would have done the same thing myself—has been to set up a National Advisory Committee under the Act of 1946. We set up a large number of local advisory committees, which are provided for in the Act, and these local advisory committees are composed of men and women in the neighbourhoods drawn from trade unions, employers, friendly societies and other organisations, whose duty—and they have done it very well indeed—was to advise the local officers, and through them the Ministry, on the administration of the Scheme. After five years of seeing the administration at close quarters, seeing the schemes

of benefits at work, they have accumulated valuable experience for the benefit of the Government, Parliament and the nation.
I know that the Minister, quite rightly, has asked all the local committees to give him and the Government the benefit of their experience. I am sure that they will have done it, and will have reported to him. When the Minister made his statement the other day, I asked him a question which I hope he will deal with tonight. I think we are entitled to be told what these local committees think about it. Why not? They are set up under the Act, and Parliament decided that they should be set up. They have been asked what are their views about the provisions of the Scheme, and about certain submissions as well, and they have reported; perhaps not all of them but I know some of them have. They have conveyed their experience and their suggestions for the future to the Ministry.
We are entitled to have that information when we come to consider the future of this great Scheme. I asked the Minister a question, and the right hon. Gentleman said that he would not like to give a reply then, because he would have to consult them. He said that he would have to see if they would be prepared for their reports to be published, and I hope that the reports will be published. Then, we shall have something more than the quinquennial Report which, between the time of publication and today, none of us have had an opportunity to consider fully.
Let us admit that none of us has been able to do more than read the Report of the Phillips Committee cursorily and to examine it as it should be examined. There is also the Report from the National Advisory Committee, and the reports which I hope we shall have from the local committees. All these should be laid 'before the House, for they are the essentials as a foundation upon which we can consider the future of the Scheme.
In the meantime, this is an interim Measure, and, if that is so, among the very serious issues which have to be dealt with in looking to the future, what do we see in this interim Measure? Since what we propose to do is to review the Scheme on the basis of the value of the benefits in 1946, why not put the struc-


ture of the scheme itself on exactly the same basis as it was in 1946?
Why not put back the financial structure of the Scheme exactly as it was in 1946? I think that that is a fair proposition. If the House is entitled, as I believe it is, to be free to consider the 1946 Act, the reports upon its working and the experience gained from it, let us start with 1946 and consider the future on that basis, and be free to decide what changes we shall make in the future.
The case for doing that has been put so admirably, so convincingly and so devastatingly from this side of the House that I do not propose to elaborate it further. It was said yesterday, and it has been said again today by some of my hon. Friends on this side of the House, including my right hon. Friend the Member for Battersea, North (Mr. Jay). When we come to the Committee stage, we shall return to this problem and shall move Amendments on the lines clearly indicated in the speeches already made.
What is the Government's reply to that? After all, they have repeatedly said, "We will restore the purchasing power of benefits to the 1946 level, and will repair all the damage done by the wicked Socialists." Very well, let them restore it. But, of course, they will not. Are the Government seeking to commit the House to permanent changes in an interim Measure? If they are not, and if all that they want to do is to restore the 1946 level, then let them put back the financial structure of 1946 so that on that basis we can survey the future.
Regarding the problems of the future, I come, first, to the words which I have already quoted from Section 40 of the Act. The words used in that Section seek to express in legal terms a principle which Lord Beveridge in his famous Report of 1942 described as the subsistence principle. But that was a principle which had been thought of and written about long before Lord Beveridge came on the scene, a principle which was first enunciated in clear form in the minority Report of the Poor Law Commission by the Webbs.
What we ought now to be considering—and this has been stressed on both sides of the House—is what I did in 1946. Lord Beveridge considered these matters

and made certain suggestions regarding benefits. In 1946, I translated those benefits into terms, taking account of the cost-of-living index for that year. But the Minister and the Minister of Health know, as indeed we all know, that since that time and particularly in the last few years there has been a great deal of confusion about all these cost-of-living indices.
Not so very long ago, there was a very interesting article in "The Times" in which it was stated that three indices were being used at the present time. There is the general cost-of-living index, which, quite frankly, the trade unions refuse to accept, there are the other indices which are used in addition, and, apparently, there is yet another index used by the National Assistance Board. That makes four.
I think that there is the strongest case for considering whether there ought to be a special index for these people, based upon the pattern of their expenditure. It is interesting to note that the Phillips Report states that there has not been, in this country, any exhaustive survey of the way in which old people and beneficiaries spend their money. Without such an examination, how can the House decide about the future of the Scheme?
In the debate last March I intervened to ask the then Parliamentary Secretary of the Ministry of Pensions and National Insurance—now Joint Under-Secretary of State for Foreign Affairs—if he would convey to the Minister a suggestion that there should be an examination of this very problem. I think that there should be. I hope that there will be. Accepting this as an interim Measure, this House needs to have before it what the Phillips Committee bemoans that it lacked—a survey of how old people and beneficiaries live. Without it, how can we decide what is required for their well-being and preservation?
Next we come to the very interesting matter of the future financial structure of the Scheme. We have had some very interesting contributions upon this aspect. I accepted Lord Beveridge's proposals for a flat rate contribution and a flat rate benefit. I thought a good deal about it. I had had experience of the flat rate contribution in my voluntary work, but I thought a great deal about it—and I want us still to think about it.
As I have been sometimes selectively quoted, I hope that it will not be out of order if I quote what I said in 1946 upon this very problem. It is not, therefore, something that I have thought up recently. This is from the speech I made on Third Reading of the National Insurance Bill, on 30th May, 1946. I was talking about contributions.
Those are the limits of contributions, and they are flat rate contributions, which the man earning £3 10s. a week pays, as well as the man earning £9 a week. It is 6s. 2d."—
that is for the self-employed class—
for the barrow man selling flowers at Charing Cross and 6s. 2d. for the barrister earning £10,000 or £20,000 a year.
I hope that the House will listen while I read the next two paragraphs, because they are important:
I think that all of us … must watch its progress with great care during the next five years, and, when we come to review it, give serious consideration to the possibility of devising some way of financing the scheme in which the contributions will be better equated to capacity to pay.
I added something else in 1946:
… I think it is important to remember, and I have now convinced myself of this, that we have reached almost the limit of what we can do in insurance and in the future we will have to think again of the fundamental principles if we are to get the comprehensive scheme which we desire."—[OFFICIAL REPORT, 30th May, 1946; Vol. 423, c. 1456.]
I said that in 1946. Surely we should, as a House, be thinking about it now.
Let me, if I may, lay down some basic principles. In any scheme, however financed, I think that it is essential that benefit should be as of right. I stand there to begin with—it should be absolutely as of right. That is a lifelong conviction, believe me, which has been driven right into my very being as a result of my experiences between the wars in my native land. I say, therefore, that benefit must be as of right. It must provide a kind of national minimum. What we have got to consider is how it shall be financed on that basis.
I know there have been suggestions on both sides of the House that we ought to shift over the whole of the Scheme from a contributory basis to one on which the whole of the burden is borne by the State. I do not commit myself to that idea for a moment. I want benefit as of right, and I want that right embodied in some form in the Bill itself.

Otherwise, if it becomes dependent on the Treasury and on political fortunes from year to year, I am afraid that what happened in the 1920s and 1930s might happen again.
I suggest seriously that, in view of the level of the flat rate contribution, which is very hard on the lower-paid man, it is time to think again. Occasionally insurance contributions can be offset against Income Tax payments. We are insured persons in this House, and we can do it. Everybody who has a claim against Income Tax offsets his contribution to the Scheme against Income Tax, so that in effect for all those who are within the Income Tax-paying section of the community, the State is paying some part of the contribution. This does not apply to those who do not earn enough to pay Income Tax.
The only man who feels the whole burden of the flat rate contribution and the full burden of any increase is the man whose income is so low that he does not come within the Income Tax paying section and, therefore, cannot offset it against his Income Tax.
The number of people covered by the occupational benefit scheme is increasing rapidly We heard some interesting figures from the Parliamentary Secretary this afternoon. We shall have to consider that problem, too, and particularly the problem of the transferability of all these pensions. Persons who pay contributions under an occupational benefit policy can set off their contributions against Income Tax. But again, the man who pays the full burden is the man whose income is lowest. That state of affairs cannot go on. We can make pensions a State responsibility. We can still maintain the insurance principle, as I am inclined to do.
I would like to consider whether we ought not to introduce some sort of graduated contribution rather than the flat rate contribution. Have we reached the stage of political and social consciousness in which we are prepared to pay unequal contributions related to our capacity, and at the same time share equal benefits? I believe we are. We ought to be willing to do it. I think that matter ought to be considered.
I want to say a few words to the Minister about the industrial injuries part of this Bill. I should like him to


listen to the people about the old cases. He knows that I tried and my scheme did not work. I should like him to consider the constant attendance allowance, because I hope that we shall return to it. One point which disturbs me about the Industrial Injuries Scheme is the low scale of assessment. We have to consider, first, supplementing the old cases; secondly, to consider reviewing in some way what I am sure will be a problem for the Minister—the low scale of assessment; and thirdly, to consider the constant attendance allowance, without which I think the scheme would have broken down.

Mr. Peake: But that is at the highest figure which it has ever reached.

Mr. Griffiths: I should have said the hardship allowance. I was hurrying because my time is up. I hope the Minister will listen to What has been said by several hon. Members on that subject.
We shall accept the Bill on Second Reading and seek to amend it in Committee. We accept it as an interim Measure and I hope we shall have an opportunity in the not-too-distant future to consider, in the light of our experience of the working of this Scheme, what changes are required. We shall therefore vote for the Second Reading of the Bill, our greatest regret being that we were not given an opportunity of voting for its Second Reading six months ago so that by now the benefits would have been paid.

9.27 p.m.

The Minister of Health (Mr. Iain Macleod): A major Bill to deal with National Insurance is almost as much the responsibility of the Chancellor of the Exchequer as it is of the Minister of Pensions and National Insurance, and I want my first words tonight to be words of sympathy with the Chancellor of the Exchequer in the final tragic blow which has fallen upon him.

Mr. J. Griffiths: May I say that I am sure all of us here join in the right hon. Gentleman's expression of sympathy, and hope that he will convey to the Chancellor our deepest sympathy with him in his tragic bereavement.

Mr. Macleod: It may be some comfort to the Chancellor and his family to know

that his friends and colleagues on both sides of the House have, for many months, with sympathy, watched him bearing a burden which must have been almost too great for a man to bear.
The House of Commons rarely gives two days for the Second Reading of a Bill, and only for Bills of the first importance. This long and admirable debate will end without a Division. This is a social service Measure which, despite the many criticisms, to which I hope to reply, commends itself to the House. Certainly, no more pleasant task has ever fallen to me than to wind up this debate. I think hon. Members know that I have always taken an interest in these matters and so, although I am a political animal and controversy will no doubt creep out from time to time, there are some matters on which I should like to try to carry most of the House with me. I want to try to answer not only the questions of the right hon. Member for Llanelly (Mr. J. Griffiths), in due course and as I come to them, but also the many most valuable points which were put from both sides of the House this afternoon and yesterday.
The right hon. Member for Llanelly was the Minister responsible when the 1946 Bill was introduced, and I say at once that he played a part which will never be forgotten in the building of our social services. I daresay that he is more proud of that than of anything else in his public life. Perhaps he will take that as a friendly preface to some of the other remarks which I shall make, which, although they will remain friendly, will not be quite so complimentary.
The right hon. Gentleman referred with some pride to a speech which he made in 1946, and I may perhaps, therefore, remind him of another speech to which he must look back a little ruefully over the years. On Second Reading of the 1946 Measure, the right hon. Gentleman said:
… the Chancellor of the Exchequer has expressed the Government's intention to hold the cost of living at about 31 per cent. over the September, 1939, level. We decided, therefore, to review the leading rates … in the Beveridge Report on the basis of an overall addition of 31 per cent. … I believe that we have, in this way, endeavoured to give a broad subsistence basis to the leading rates, within the framework of a contributory insurance scheme."—[OFFICIAL REPORT, 6th February, 1946; Vol. 418, c. 1742.]


I must say that I found the precision of that 31 per cent. irresistibly comic. I believe that there is only one time in our political history at which such a thing could have been said—the time of the Socialist Government—and only one person who could have said it, the Chancellor of the Exchequer at that time. It has been a disastrous thing for the future of our social services that that most disastrous of all Chancellors the right hon. Bishop—[Laughter]—the right hon. Member for Bishop Auckland (Mr. Dalton) was then in charge of our finances. I do not want to labour the party side of this matter. The trouble is that the right hon. Member for Llanelly built well, but, because of this he built on sand and this confidence was never justified. As the right hon. Member for Ebbw Vale (Mr. Bevan) said this afternoon, these figures slipped through our gasp.
When the appointed day came, on 5th July, 1948, they were already out of date and went on getting further and further away, in spite of the sad little experiment—which, looking back, I think is a fair description—of the 1951 Act. If there was to be anything like the broad subsistence basis to which the right hon. Member referred these rates, because of the complications of rent, had to be well above the Assistance scales. That is what we set out to do. There was a gap of 6s. between the proposed rate of 26s. and the 20s., a gap in favour of insurance. That gap narrowed from 6s. to 2s. on the appointed day and the position became level in 1950. It had slipped away from us already by an amount of 4s., I think, in 1951.
I do not accept it as a criticism of this Scheme that it pulls the National Insurance ahead of the National Assistance scales. I regard this question of the battle of the gap as of the first importance in our social services. I do not: believe that we could watch with satisfaction the numbers on Assistance growing and growing, under both Governments, all those years. We surely must rejoice—as the Minister was able to tell us yesterday—when we know that the figure steadied in 1953 and moved a little in favour of National Insurance in 1954.
On the matter of these figures gradually slipping away from us, we did not start to retrace our steps until 1952, when we put the National Insurance benefits back to their 1948 value. Indeed, we did rather

more because we gave a 25 per cent. increase for an index rise of 22 per cent. and with this Bill we complete this part of our task. It is only one part, but it is a great achievement to have completed it.
We have done better than mathematics alone—however we calculate the figures—would have asked for. Whereas an arithmetician might have been content with 4s. 9d., or the round 5s. which played such a part in discussions about this matter before the Bill was announced, the Minister, a "hard-faced" Tory Minister—we remember the phrase a day or two ago about being complacent in face of social injustice—said that what was good enough for the arithmeticians, and, indeed, for the early editions of "Challenge to Britain," was not good enough for him. To use a colloquialism, that has an exact meaning here: "Not by half it wasn't." I am, frankly, proud to commend this Measure to the House of Commons.
There is something else to say to the right hon. Gentleman the Member for Llanelly. At last, after all these years, we have made an honest man of him. At last, he can read that speech of his in 1946 without blushing about it. We have made an honest man of him, and because he has a generous heart, which he does his best to disguise at the Box, I think he rejoices.

Mr. J. Griffiths: I rejoice still more because the Minister, several months afterwards, accepted the T.U.C. figure.

Mr. Macleod: If the right hon. Gentleman wants to go back to all the calculations of 1946, he must also go back to the 8½ per cent. calculation of unemployment.

Mr. Griffiths: The Minister knows perfectly well that the figure of 8½ per cent. was put forward by Sir William Beveridge, as he then was, and was accepted by the Coalition Government, of which the Minister of Pensions and National Insurance was a member and I was not. I accepted it, also.

Mr. Macleod: I was, of course, making a debating point and so was the right hon. Gentleman. All the same, he will have to add a footnote to the collection of his speeches to explain that when he said that the Government would do this, he meant, not his own Government, but a subsequent Tory Government.
I have no desire whatever to claim to the House tonight that the main part of our task is done. This part is done, but—and here I come to the reasoned and reasonable speech of the right hon. Lady the Member for Fulham, West (Dr. Summerskill)—there still remains the great question of whether the structure itself is sound. The right hon. Lady also said that she hoped that some of these matters, at least, could be discussed in a reasonably non-party manner when we came to them, and I think that that is right. After all, this country does not like one-party Government, and we can be reasonably sure that in these years—the years of the emerging deficit, as we can call it—both the great parties of State will have the responsibility of running this Scheme. Therefore, it matters to us all that after the arguments are finished, we should get a measure of agreement about the fundamental principles.
Many hon. Members of the House have, over the years, forced the attention of the House to many most important matters. Hon. Members like the hon. Member for Sowerby (Mr. Houghton) and the hon. Member for Bedwellty (Mr. Finch), on the other side of the House, and my hon. Friends the Members for Govan (Mr. J. N. Browne) and Wolverhampton, South-West (Mr. Powell), on this side of the House—everybody, in fact—have played their part. I only want to indicate in a moment or two some of the questions that I regard as being of great importance.
This is the first question to which I draw the attention of the House. I quote from the beginning of paragraph 239 of the Beveridge Report:
Any plan of social security worthy of its name must ensure that every citizen, fulfilling during his working life the obligation of service according to his powers, can claim as of right when he is past work an income adequate to maintain him.
Is that still our text, implying, as it does, contributions not only from the employer and the State, but from the employee as well? If that be not our text, exactly what are we prepared to put in its place?
I firmly believe that people like to feel that these benefits are theirs as of right and that they have earned them. They prefer to deal with the State in this

matter as a banker and not as either an inquisitor or a dispenser of charity. The arguments, attractive and tempting though they may seem, that are being put forward with a rather too easy comparison with the Health Service, for example, are unsound. I do not want to go into that argument. The case was argued, for example, in the Beveridge Report, and I agree with the conclusions that Lord Beveridge reached.
Then there are the questions of whether we should retain the retirement qualification, and of the earnings rule and the increment policy. There are many matters of great importance into which we must, and will, go.
I will answer some of the detailed points presently. All I want to say about the financial provisions of this Scheme is that they are complicated. The Government Actuary has charted a path for us through these difficult seas in what is a brilliant document, the quinquennial review. There have been two points of dispute here. First of all, the actuarial calculation of the contribution, and, secondly, the correct percentage of the Exchequer supplement. The complaint that has been continually made is that the Bill is unfair to the worker, in that it takes too much money from him in contribution.
I wonder whether I may put one or two simple propositions to the House and draw a simple conclusion from them. I think they show how wise the Phillips Committee was to suggest that in this matter we should talk about an age 16 contribution and not an actuarial contribution. The first consideration is this: for this Bill and for every variant of the Scheme everyone is a late entrant except those who are 16 years old on the appointed day and start work that morning. The second is that between 16 and 18 the full amounts of contribution are not paid. Thirdly, we know that the amounts necessary increase so rapidly that the contributions of an employed man of 25 should already be one-third higher.
I went into this very carefully in view of what was said yesterday. It follows that there must be a year in which the contributions and the help from the Exchequer supplement more or less balance, and I am told that that year is that


in which the 16-year-old contributor becomes 23. I should like to call that the actuarial age. This conception I am offering to the House is new, but when we take those premises, and when we argue that the Bill is unfair to the workers, what we mean is simply that we can make a case that the Bill is unfair towards workers aged between 18 and 23 provided we do not alter the benefits over the next 49 years. That is all. All the speeches we have heard on this point come back to this proposition, which I need not waste time in discussing.
This actuarial age of 23 means simply that if we argue, as the T.U.C. does and as many other people do as well, for a one-fifth contribution from the Exchequer leaving four-fifths for the employer and the employee, then at the age of 23 the contributor and his employer would pay four-fifths of the amount necessary to obtain all the benefits. In other words—and it is a wonderful thought—if we were all 23 and all stayed 23 the Scheme would be perfectly balanced for ever—

Mr. S. Silverman: And we should not need the old-age pension.

Mr. Macleod: —and, no doubt, the Government Actuary would be happier.
The hon. Member for Nelson and Colne (Mr. S. Silverman) touches the point. That does not happen. We get older. It is distressing for us all, particularly the Government Actuary, so this enormous burden falls upon us. However, I do think that there is some value in remembering the conception of the actuarial age I have put forward, and in realising that when we talk about unfairness we are talking only about that very small margin of contributors.
I come now to some of the matters mentioned by some hon. Members. I hope I shall be forgiven if I take them rather quickly, because there is not an immense amount of time in which I can answer them. The right hon. Gentleman made rather heavy weather about the timing of the presentation of the Bill and the related documents. I realise that he had not much straw for making bricks, and that he did his best. He asked whether my right hon. Friend considers that he has fulfilled his obligation under Section 40. The answer is yes.
The right hon. Gentleman asked, about the size of print of the Memorandum. He turned to the inside papers to discount that it was a report pursuant to Section 40. He could have found that on the title page as well. Then he said that he could find no date, apart from December, as given on the title page. If he will look at one of the inside pages he will see the date, 1st December, 1954.

Mr. J. Griffiths: The Report contains a separate Appendix and the date of the Appendix was December, 1954, no day being named.

Mr. Macleod: Yes, the Minister's report is dated December and the report on the Bill is dated 1st December.
The right hon. Gentleman then tried to make some play about the Phillips Committee having been appointed as part of my right hon. Friend's duty under Section 40 of the Act. With great respect, that is quite untrue. The Chancellor of the Exchequer appointed the Phillips Committee and, indeed, that Committee reported, as we can see, to him. The final point relates to something that was said by the Minister of Defence at West Derby. I spoke at West Derby to an audience of 11, so I had considerable experience of that by-election. The right hon. Gentleman answered his own question. We all knew roughly what the benefits were going to be. We had said over and over again that we were going back to the 1946 value.

Mr. Griffiths: Why not have brought in the Bill?

Mr. Macleod: Because one could not know until the Actuary's Report was produced what the contributions were going to be.
My hon. Friend the Member for Reigate (Mr. Vaughan-Morgan) and my hon. Friend the Member for Mitcham (Mr. Carr) made very important points about whether the Bill would make a difference to and, of course, improve the rates paid for sickness benefit to hospital in-patients and the pocket money allowance to residents in homes. The answer is, yes. The necessary action will be taken as soon as possible and the necessary regulations will be laid.
There was another point, in which the hon. Member for Bedwellty is interested. That is the amount paid nominally by the patient but actually by the local


authority or the National Assistance Board, as the case may be. We had an argument about this on a misapprehension in the debate on a Prayer some time ago. The Treasury is discussing that matter with the National Assistance Board and the local authorities and there will be no delay in announcing the decision.
The right hon. Member for Battersea, North (Mr. Jay) asked a question about private superannuation schemes. The answer is contained in paragraph 230 of the Phillips Report. I know that it is difficult to keep all these things in mind, but there it says:
… It is thought at present the annual sacrifice of revenue involved may be of the order of £100 million.
No doubt that is subject to a wide margin of error, but even so it is substantially more than the figure which the right hon. Gentleman gave, though I would not admit that the right comparison is with £70 million, because of a number of other things, such as tax relief on insurance contributions, which have to be taken into consideration.
I should like to say a few words about the most interesting speech of the right hon. Member for Ebbw Vale. Everyone, including himself, enjoyed it and I certainly enjoyed it very much. I will not go into great detail about it, because most of it was not directed to me but to his three-year-old battle with his right hon. Friend the Member for Leeds, South (Mr. Gaitskell). The right hon. Gentleman spent the first half of his speech rewriting our social-service dictionary. He told us that all our words were out of date and that we must not use them any more. I am afraid that for the moment I must go on using the old words until new ones are found.
The right hon. Gentleman gave the House a scintillating display of his own brand of economic wisdom. We waited to see how it would end. It ended with the declaration that we must abolish the contributory system and that, in his own words, we must not lick stamps. The right hon. Gentleman knows social history very well. Has he forgotten the slogan which followed the Lloyd-George Budget in 1909, and the 1911 insurance Act—"We won't lick stamps"? That is What Tory Duchesses were saying in the

Albert Hall, 45 years ago. This is our great reactionary. From his seat on the fourth bench back the right hon. Gentleman's social policy has gone back to 1911. If he takes the final stage and puts his back to the wall he will probably regale us with the philosophy of the first Duke of Wellington.
It is true that many of the right hon. Gentleman's points were directed against the 1951 Budget, on which he resigned, believing that it brought great social injustice. He must not feel that hon. Members on this side of the House felt the same passion as he did about that Budget, with its Health Service charges and its juggling with the Exchequer contribution and its proposals for National Insurance. However, perhaps I can carry the right hon. Gentleman with me on this point. We do not regard the right hon. Member for Leeds, South as an architect of Tory social policy, but we find him a very useful bricklayer.
Some most important points were pu to me by the hon. Member for Wigan (Mr. R. Williams), who speaks with great authority and knowledge on this subject. He talked particularly about the old scheme. He knows that this has been a curse, in the sense of a difficult problem, to successive Ministers, many of whom have done their best for it, but have found very serious problems indeed. All I need do at the moment is to refer the hon. Member to paragraph 6 of the Government Actuary's Report, which makes it clear that the problem will later form part of another review, as the House will expect, and the Bill deals only with the problem of rates and benefits under the 1946 Act.
The hon. Member for Walthamstow, East (Mr. Wallace) put, a specific point about someone with an income of 84s. per week and a rent and rates charge of 19s. As my hon. Friend the Member for Mitcham very convincingly showed, it would be difficult to find a better example of the—I put it no higher than this—emerging justice in this field. If we deduct the 19s. for rent and rates we come to the figure of 65s., which, my hon. Friend argued, is precisely the figure for a man and wife under the Bill. It is only 2s. more than the National Assistance scales. We are, thus, beginning to come fairly near the figure which


the hon. Member gave as the qualification for subsistence.
There is one very important question about which I must speak. Need we fear the future? I have made some fairly gloomy speeches in the past about some of these figures, but the figures are not unexpected. The hon. Member for Sowerby made the point well. We knew the figures would emerge. In some ways they are more favourable than they might have been, and they may move our way in the future. Both Governments have given instructions for an unemployment figure to be calculated which it is at the same time their major social aim at home to render unrealistic. We may hope for some benefit there. We may also hope that the sickness benefit figures are too pessimistic.
The main question is, of course, retirement pensions, but I should like to look at the medical side, in which I have a particular interest. If one looked only at the numbers of old people and the demands which they may make, one might despair, but if one looks at what has been done in the past 10 years—at all the achievements of surgery and, particularly, chemistry, at the new techniques of healing and rehabilitation which are emerging—I see no reason at all for despair. I do not think that we should look at the problems of 1980 only with the actuarial eye of 1954. If we are to double our standard of living in the future, I believe that we can carry these burdens, and higher ones, too, in our stride.
I do not need to underline the magnitude of the administrative job that lies ahead. Many right hon. Gentlemen on the Opposition benches know it swell, and they have paid very fair and generous tributes to it. We all recognise how formidable it is, but there are still some unknown factors. One of them was mentioned by my hon. Friend the Parliamentary Secretary in his speech this afternoon. We do not know, for example—and this is a very big unknown factor—whether or not our old enemy flu is going to attack us in January. All we know is that some of the signs are not very encouraging. We know there is a good deal of 'flu in the north—not of a very virulent type—and that it may be expected to move south. There are signs

of it. It seems very likely that there will be very considerable and substantial extra burdens put on the staffs who are to try to run this great scheme in January.
Even if that be so—and I think it is a fair summary of the position—we can do a good deal in this House. The newspapers have been prophesying for some time that there would be a Division on the Second Reading of the Bill, but I have never believed it for a moment. Of course, there were big matters to be argued out, but it seemed that this Second Reading would go through on principle. I am, therefore, most grateful to the right hon. Member for Llanelly who told us of the help that his party would give—despite all the reservations that he made, and I noted them—in the later stages of the Bill.
There are Committee points of the very first importance that must be thrashed out and there are even bigger questions lying behind this two-day debate that we have to argue out, not entirely across the Floor of the House but partly among ourselves as well. In that way a social policy for the country may eventually emerge which has some recognition from both sides of the House.
The Bill is, in effect, a promise to pay. It is a We-O-U. My right hon. Friend the Minister said some time ago that he would introduce a Bill which, he claimed, would be the boldest and the biggest operation ever undertaken in pensions. I have heard some criticism of that phrase, but I do not think that fair-minded men and women who know of these benefits and contributions will come to any other conclusion than that the Bill is a splendid advance in the pensions field.
My right hon. Friend has done his part; he has been as good as—and better than—his word. Now perhaps the House of Commons can do its part so that we can hope to make the Bill not only the biggest and boldest operation in the pensions field, but the swiftest as well.

Question put and agreed to.

Bill accordingly read a Second time.

Committed to a Committee of the whole House.—[Mr. Kaberry.]

Committee Tomorrow.

NATIONAL INSURANCE [MONEY]

Considered in Committee under Standing Order No. 84 (Money Committees).—(Queen's Recommendation signified.)

[Sir CHARLES MACANDREW in the Chair]

Motion made, and Question proposed,
That, for the purposes of any Act of the present Session to increase contributions and (benefit under the National Insurance (Industrial Injuries) Acts, 1946 to 1953, and the National Insurance Acts, 1946 to 1953, it is expedient to authorise the payment out of moneys provided by Parliament—

(a) of any increase in the sums payable out of moneys so provided under—

(i) paragraph (b) of section two or subsection (1) of section sixty of the National Insurance (Industrial Injuries) Act, 1946; or
(ii) subsection (3) of section two of the National Insurance Act, 1946 (as amended by section one of the National Insurance Act, 1951), or subsection (1) of section thirty-eight of the National Insurance Act, 1946,
which is attributable to any provision made by the said Act of the present Session for increasing any rates or amounts of contributions or benefits under the National Insurance (Industrial Injuries) Act, 1946, or the National Insurance Act, 1946;
(b) of contributions to the National Insurance Fund (additional to the Exchequer supplements) in respect of the period of five years beginning with the first day of April, nineteen hundred and fifty-five, not exceeding in all three hundred and twenty-five million pounds.—[Mr. Peake.]

10.0 p.m.

Mr. Jay: I only want briefly to ask for an assurance now, on behalf of my hon. Friends, that it will be possible, within the terms of the Money Resolution, to put down certain important Amendments to the Bill. For reasons we all know, the Bill is being rushed rather rapidly through the House. We have no desire to delay it, but we wish

to put down certain important Amendments and we would like to be assured at this stage that they will be within the terms of the Resolution.
Those Amendments will cover three main topics. First, we shall seek to move Amendments to reduce the contributions of the contributors into the Fund. I take it that that will not be out of order, because a reduction in a contribution of that kind from the employer or employee will not automatically impose any charge upon the Exchequer. Secondly, in certain cases we shall seek to move Amendments to increase some of the benefits. Since those benefits are paid out of the Fund, I understand that they will also be in order. Thirdly, we may wish to move that the Exchequer supplement ought to he increased.
On the face of it, it might appear to most of us that that would impose a charge upon the Exchequer and would not normally be in order, but so far as I can understand from the terms of this Money Resolution it would, in fact, be in order to move an Amendment of that kind. I hope that the Minister can assure us upon these matters.

Mr. Peake: So far as it is within my power I am most happy to meet the right hon. Gentleman's wishes. I must say, however, that what is or what is not in order is not a matter which the Government can control; it is bound to be a matter for the Chairman of the Committee of the whole House. But I would say that this Financial Resolution has been drawn with an eye to the three points mentioned by the right hon. Gentleman and, so far as we know, all three matters to which he has specifically referred will be in order during the Committee stage of the Bill.

Question put and agreed to.

Resolution to be reported Tomorrow.

TRADING ESTATE FACTORIES, SUNDERLAND

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Kaberry.]

10.3 p.m.

Mr. Frederick Willey: I want to initiate for the fourth time in this Parliament a debate upon the North-East Development Area. On this occasion, as upon the last on 16th July, I want in particular to raise questions regarding the Government-owned factories in Sunderland which are at present vacant. This is a matter which affects not only me but the hon. Member for Sunderland, South (Mr. P. Williams).
When I raised these matters in the summer, I sought to afford the Parliamentary Secretary a better opportunity to deal with them than at Question time. As I said then I appreciate that the hon. and learned Gentleman shares my concern about the position of Sunderland and has been anxious to do what he can to provide work in these factories. I may not be as critical on this occasion as I was upon the last one, but I believe there is all the more reason that I should afford the Parliamentary Secretary an opportunity of making a more satisfactory progress report than he was able to do last time. I hope he will take this occasion to explain more fully the reply he gave me on Tuesday last, and I am sure he will be pleased to know that, according to the "Sunderland Echo, "I" expressed pleasure at the answer" he then gave me.
I want first, however, to deal with the general background against which we must discuss the three vacant factories. Compared with the time when the Government took office, and I take this as the period of the Parliamentary Secretary's responsibility, the Government-owned factories could reasonably have been expected—I do not put it too high—to have employed between 2,000 and 3,000 more persons than were being employed in the winter of 1951. In fact, this is a cause of anxiety in Sunderland, because that is not what has happened. On the contrary, these factories are today employing 1,463 persons less than they were in September, 1951, and the major reason for this lack of employment is the

redundancy which has occurred in regard to women workers.
If we look at the case of men, and we have been particularly concerned about providing employment for men in Sunderland, we find that there are only 95 more men employed in these factories than there were in September, 1951. I am sure that the Parliamentary Secretary would agree that this is a very small contribution towards the problem which will face us in Sunderland. Moreover, since February of this year, there have been 66 fewer men employed in these factories, and this is a matter which must cause some concern in Sunderland.
Whereas we would have expected, if things had gone well, that between 7,000 and 8,000 people would be employed in these factories, today we have only 4,000 people engaged, which is 1,500 less than the numbers engaged in the winter of 1951. That presented us with two problems, one to take steps to provide more work for women, and, secondly, to make more real and urgent progress in providing alternative work for men. It is against that background that we have to assess the present development.
The questions I should like to put to the Parliamentary Secretary are these. We have the Bristol Aeroplane Company in Sunderland, and we are very glad to have them. They came during the time of the last Government, but extensions have taken place in recent years and are very encouraging. Will the Parliamentary Secretary tell us, if he can—and I am trying to see what contribution is being made to our overall difficulties—the number of people employed at present by the Bristol Aeroplane Company and the number likely to be employed in the near future?
We also have, on the Trading Estate, the new Edison-Swan factory, which was mentioned in the last debate, and I assure the Parliamentary Secretary that it is an important contribution to our difficulties in Sunderland. It is a factory which will be over 200,000 square feet in extent, and I should like him to tell us whether he can give us any indication of the completion date, and when we might expect several hundred people to be taken up by this factory.
To deal with the three factories to which the Parliamentary Secretary referred in the answer he gave me on


Tuesday, and which we have been discussing for some time, we welcome the fact that a factory has been taken over by Thorn Electrical Industries. The Parliamentary Secretary will realise that this is a firm which was interested in Henderson Brothers, and that efforts were made to persuade them to come in and back Henderson Brothers. We are very glad that they are now in Sunderland and are to take over one of these three factories. I should like the Parliamentary Secretary to give us some rough guide concerning the number of men and women likely to be employed in this factory, and particularly the number of men who may be taken on to do similar work to that carried out in the shipyards.
Lamson Paragon are coming to the second factory. I assume that they will engage in work not dissimilar to the work undertaken by Fordhams before that firm closed down, and I should like the Parliamentary Secretary to give us some comparative figures and to say whether Lamson Paragon will be employing about the same number as Fordhams employed.
Then we have the case of Brian Mills which are coming in to take over the Price's factory. I understand that they propose to employ more than 1,000 clerical workers. I say at once that this is particularly attractive to Sunderland, because one of the difficulties of a heavy industrial town is that there is little opportunity for people who wish to turn to clerical employment. Rather than be attracted out of the town, it is far better to have this employment provided within Sunderland. I hope that the Parliamentary Secretary can confirm the estimate of 1,000 as the likely figure for this factory.
But in this case—and at the moment, at any rate, I am not raising it in any hostile spirit—there is a new factor, because the firm is not leasing the factory, but is buying it from the Government. This, as I am sure the Parliamentary Secretary would concede, is exceptional. I do not know whether I can get this information from the hon. and learned Gentleman, but I think that we ought to know at what price the factory is being bought and at what cost it was constructed. We should at least

satisfy ourselves that commercially this is a prudent transaction.
The point which, at any rate initially, disturbs anyone who has been interested in Development Area policy is that if factories are sold the Government lose control over them and have no further say in their future use. On the other hand, I at once concede that it might be a good thing for a firm to be willing to purchase a factory outright, thereby showing confidence in its venture in Sunderland. But, as I think the Parliamentary Secretary would agree, this is not an easy problem.
I realise that this is a factory outside the estate. It is not embarrassed by questions of common service, and the like, but, on the face of it, I think it somewhat disturbing, and I hope that the Parliamentary Secretary can give us the assurance, firstly, that this action is one which is confined to this particular instance, and, secondly, that this does not indicate any departure from Development Area policy. I mention this because I was not altogether satisfied either with the attitude of the Parliamentary Secretary or of the hon. Member for Sunderland, South on the point I made last time about consultations.
I have always taken the view, that the Government and the Trading Estate Company, on which I served for a time, should endeavour to get the closest association with and the confidence of industrialists coming into the Development Area. I do not think it unreasonable to expect the industrialists to share that confidence with the Government. If they have any change of plan regarding production or regarding the closing down of factories, they should consult at once the Trading Estate Company and the Government.
That question did not elicit a very sympathetic reply from the Parliamentary Secretary, and for that reason I hope that the action which has been taken regarding the Price's factory does not indicate any return to laissez faire with regard to the Development Areas. I have always found that almost all the industrialists have been willing—anxious, in fact—to discuss their programmes and plans with the Trading Estate Company. I hope that the Parliamentary Secretary will encourage this and will not regard it as a matter


peculiarly within the province of private industry.
So much for the three factories. Until I get a reply from the Parliamentary Secretary, I am not sure, of course, as to the likely employment, but, in itself, this present development does not seem to be nearly sufficient to meet the primary difficulties of Sunderland. I make no apology for once again urging the Parliamentary Secretary to give us a hopeful statement about the proposed Trading Estate North of the river. Pallion is now almost built up; and unless we can show new industrialists a developing estate it is difficult to persuade them to come to Sunderland.
A survey has been made north of the river, the plans have been prepared, and I think that the time has come when we should proceed with that development. Particularly now that the problem of the three factories have been dealt with, we have to be able to offer to industrialists an attractive site on which we may build their factories. The Parliamentary Secretary having now got over his immediate difficulties. I hope that he will be able to give us an encouraging reply about a new trading estate for Sunderland.
A smaller point, which I have previously mentioned, is that of Government contracts. If I may say so, I did not think the Parliamentary Secretary's reply on the last occasion was adequate. I should like him to look at the problem of getting top priority for particular districts within the Development Areas. I know all the difficulties, but we in Sunderland, at any rate, feel that something more might be done.
I do not know what the hon. Gentleman's experience is, but my experience is that firms in Sunderland have the impression that the assurance given about Government contracts means very little at all. I hope that the Parliamentary Secretary will take this occasion to allay that suspicion. Quite apart from that, I Should like his assurance that he will investigate the problem of treating differentially different parts of the development areas.
One final point I emphasise what my right hon. Friend far Huyton (Mr. H. Wilson) said during the debate on the Gracious Speech. In view of the continuing interest we are showing in

Development Areas, not only in the North-East but throughout the country, I hope that the Government as soon as possible will prepare a White Paper on their development policy.

10.19 p.m.

Mr. Paul Williams: Unlike the occasion last week, tonight it is not only to be the river which divides the hon. Member for Sunderland, North (Mr. Willey) and myself but the Floor of the House. I think that we have reverted to our normal roles of opposition to each other. Last week we agreed on what should happen to the Port of Sunderland; this week I shall try to cross swords with him on political grounds.
The hon. Member mentioned the Bristol Aeroplane Company, which now operates in Sunderland to an increasing degree. He asked for an assurance about its future with regard to Government contracts etc., and said that there should, at least, be some certainty for civil aviation so that the firm may build engines for its own aircraft. It would be better if we knew that the Airways Corporations were to buy British aircraft, and that we were not to be continually disturbed by news that they were to buy from America. It would be better for the Bristol Company in particular and Sunderland in general if we knew that there was a future for Bristol aircraft and engines.
While the hon. Gentleman was speaking I thought back on some of the things which have happened during the past few weeks and months. I thought that his speech this evening was in particular contrast to the usual trend of his Questions and, more particularly, to his supplementaries. He was, for a change, congratulatory and almost pleasant to the Parliamentary Secretary. It is a role which, I must admit, becomes him for a change.
But there is a certain background to this whole issue, for this matter of trading estates generally and development in the North-East was discussed in some small measure in the county council some time ago. Councillor Youngson asked for some information about an approach by the Durham County Council to, I gather, the President of the Board of Trade, and perhaps I may be allowed to quote from the reply of Councillor McDarby, who is


the Chairman of the Planning Committee. He said:
The fact that there is a Tory Government at Westminster is proof that we have to send for the people, the only people, who will help us.
That is, presumably, the Socialists; I do not know.
It is no use our friend"—
that is Councillor Youngson—
suggesting that the Tory Party will help. Not on your life.
That seems to me to be in particular contrast to the moderation and reasonable attitude of the hon. Member for Sunderland, North (Mr. Willey) this evening.
I should like to know whether the hon. Member for Sunderland, North will make up his mind whether he is treating this matter as one of genuine welfare of the people of Sunderland or whether he is treating it as a party political matter. I suggest that this sort of partisan background in County Durham is in particular contrast to the reasonable attitude which we have seen here this evening.
I also understand that there was to be a delegation to see the President of the Board of Trade. What has happened to that delegation? I am told that it was to meet at 3.30 this afternoon, but I received a peculiar message saying that the meeting was off. Why was it off?

Mr. Willey: This is the first time that I have heard of a delegation to anyone at 3.30 this afternoon.

Mr. Williams: That may be so, but there was to be a delegation from the Durham County Council, and suddenly this delegation disappeared into thin air. Has it done so because the delegation would not get any help from the Tory Party? This is partisan politics in County Durham run riot, and it is nonsense for the hon. Gentleman to turn up here in this reasonable frame of mine to congratulate the Parliamentary Secretary on what has been a hard job—and it has been a hard job to get people to come to Sunderland because of the difficulties and criticisms about the trading estates in the last 18 months.
I wish to make only three points this evening. I should like to know from the

Parliamentary Secretary whether he will use his influence to get the President of the Board of Trade to come to the North-East and visit the trading estates as soon as possible, not because we are uncertain of the future of the trading estates but because we have a first-class show to show to the public. It is a good show partly because of the work of the chairman of the North-East Trading Estates. I am sure the hon. Gentleman will agree with me in that. We should pay particular tribute to the chairman who has done a magnificent job.
There is only one question I would ask, and I regret not having given my hon. and learned Friend notice of it. The other day I went round the exhibition of the trading estate at Team Valley. This was the first time I had seen it, and perhaps that is a regrettable admission to have to make. I was more than impressed to see in three dimensions the products of the North-East Trading Estates. I wish all those products could be put publicly on display so that the people who work on the trading estates could see the final product of all the companies and understand the value of the trading estates, so that they could have some pride in the trading estates and so that we could improve the pride in the North-East.
I should like to know whether it is possible to find some way of putting on show publicly in the North-East, and in London as well, if possible, the products of our trading estates so that all may see and realise the value of the work in the North-East.

10.25 p.m.

The Parliamentary Secretary to the Board of Trade (Mr. Henry Strauss): I certainly make no complaint of the friendly attitude of the hon. Member for Sunderland, North (Mr. Willey). Whatever words have passed between us on any other occasion, our personal relations have remained friendly and he has always given me some indication in advance of the topics he would raise.
I have little time, and if I do not deal with everything raised by the hon. Member and my hon. Friend the Member for Sunderland, South (Mr. P. Williams), perhaps we can discuss them afterwards. The hon. Member for Sunderland, North mentioned at the outset a


decline in the figures, since a date in the past, of those employed in Sunderland itself. It is only fair to remember that the numbers employed in the factories in the North-Eastern Development Area as a whole have never been as high as at present. I can give him this assurance: when the three factories mentioned in a recent Question, which have until recently been empty but have now been disposed of, are under their new management, and when the new Edison-Swan factory is built and further development in the aeroplane factory is bearing full fruit, all the deficiencies which worry him will be more than made up.
That brings me to his request for statistical information about the numbers employed in particular concerns. I cannot meet him on that, and I would remind him that there is a legal objection to my doing so. In the case of figures obtained by Government Departments—in this case by the Ministry of Labour—such as figures of employment in particular factories, there is a statutory prohibition against disclosure in the Statistics of Trade Act, 1947. As for the estimates of future employment, I do not wish to meet him there either, because these estimates are based on confidential information from tenants and prospective tenants, and we should do harm to the cause which he and my hon. Friend the Member for Sunderland, South have at heart if we disclosed anything of that confidential kind in the House. I therefore prefer to give him a general assurance.
The hon. Member raised the question of the sale of what was formerly Price's factory. Let me say at once that that case is de facto exceptional in the sense that such a sale does not often happen. It has happened before, but I think it is likely to remain unusual, not because it is improper but because the occasion will not normally arise.
He is right in thinking that each particular case must be considered on its merits. In the present case, we are satisfied that the decision is likely to be in the long-term interests of Sunderland. He was right in pointing out that it is not a factory on an estate, and I think he was right to be encouraged by the fact that firms are so certain of their future that they are prepared to buy their own premises. He will also have noted that that does not mean that the Government

are not continuing to invest capital on a large scale in estates in the North-Eastern Development Area.
The hon. Member asked me to say a word about the development of an estate north of the river. I cannot give him an assurance about that because, frankly, that would not be a right use of funds available for development; it would not be essential or economic since at present there are a number of prepared sites still available on the Pallion Estate, and there would be no good reason at the moment for developing a new one.
I am bound to say that firms and companies in Sunderland enjoy all the advantages which any firms in Development Areas enjoy in respect of Government contracts. Those will be known to him because they are based on the same principles as were in force when he was a member of the previous Administration. When he suggests that Sunderland should have some special consideration over and above that, I am bound to tell him what will be obvious to him already, that if I were to say "Yes," his own colleagues from other Development Areas would attack and blame me with far more reason than he has ever had to attack the Board of Trade.
The hon. Gentleman said that he was a little dissatisfied with what I said last time on the subject of consultation. Frankly, I do not think he should have been. I am going to do what I very rarely do and that is to quote what I said on the last occasion. Here are my words:
An appeal was made that we should ask people who came to the Development Areas to consult us before making important changes in their businesses. Frankly, I believe that to adopt that suggestion would do more harm than good, for the reason given by my hon. Friend the Member for Sunderland, South. I say at once that we do our best to keep in close touch with our tenants. They often inform us in advance of any proposed changes. We welcome that, but there is no obligation on them to do so.
I think that it is important when we are trying to attract business to a Development Area to take the attitude that I adumbrated at the beginning of my speech. We should say that it is a good place to go and that they will get a good factory and good people to employ. We should not tell them that they will be under any disadvantage or obligation to which they would not be subject if they went elsewhere. They should have the same right to commercial freedom and to


privacy as they would in other circumstances. I should not wish to give the impression that they would run any abnormal risk of having their affairs discussed or questioned in the House."—[OFFICIAL REPORT, 16th July, 1954; Vol. 530, c. 952.]
I am unwilling to give this House information on these matters because I am considering the interests of Development Areas and I know some of the difficulties of attracting new companies and firms to those areas. If we say, "If you come to a Development Area you will be subject to a prying into your affairs on

the Floor of the House of Commons to which you would not be subject if you did not come to a Development Area," that would be the last way in which to get people to come to these areas. I beg the hon. Gentleman not always to assume that because the Board of Trade differs from him it is wrong.

Question put and agreed to.

Adjourned accordingly at Twenty-seven Minutes to Eleven o'Clock.